Posted on 05/02/2007 12:34:29 PM PDT by Republican Party Reptile
In any industry Ezekial Ayewale might be a considered a good hire.
A 10-year veteran in his field, the Nigerian native, who is in his early 30s, has advanced degrees and a lot of enthusiasm.
But in the oil and gas industry, where Ayewale works as a field engineer for an offshore drilling operation, he's almost a precious commodity.
As the industry faces the dual pressures of an aging work force and a depleted pipeline of new recruits, workers in a number of positions are finding themselves more popular than ever.
The average salary for a petroleum geologist with 10 years experience jumped 23 percent in the past three years, according to a study released this week by the University of Houston and the Boyden executive search firm, from $107,500 in 2004 to $132,132 in 2006.
Less-skilled workers, like the drillers who man the controls of rigs, have enjoyed even higher percent bumps during the same period, from about $36,000 to $58,000.
Some major oil companies are paying up to $15,000 in sign-on bonuses to hire entry-level geologists with master's degrees, the study said.
"Signing bonuses, retention bonuses, stock options, you name it," said Bill French, executive search director with the recruiting firm Worldwideworker.com. "Companies are having to get creative."
Ayewale, who wandered the Offshore Technology Conference's aisles Tuesday looking at the latest technology and seeking job leads, said he was confident about his prospects.
"I think I can do better for myself than I am right now," he said.
It costs to keep workers The shortage may be a boon to workers but it's costly for companies. According to the UH-Boyden study, the added cost of attracting, training and keeping workers in this environment is costing the industry more than $5 billion annually.
The current sellers' market for workers has its roots in the mid-1980s oil price crash, when companies cut work forces drastically. The petroleum industry lost almost half a million jobs between 1982 and 2000, according to the American Petroleum Institute.
Oil-related engineering courses fell out of fashion as students seeking technical degrees were lured into software development in the early 1990s and Web development in the late 1990s, French said.
The rebound in oil and gas prices in the past few years comes as the industry's most experienced workers are beginning to consider retirement and the prospect of discovering new talent is at an all-time low.
About 40 percent of the work force is between the ages of 40 and 49, and another 32 percent are 50 or older, according to the UH study. Enrollment in U.S. universities for petroleum engineering programs is down by 85 percent from its peak in 1982.
"Demographics and the education system can't supply what's needed," said French.
As it has been for several years, the worker shortage is a top concern at the Offshore Technology Conference this week at Reliant Park.
"The industry is looking at a huge crew change," said Steve Dittman, marketing manager for Petroskills, a Tulsa, Okla., company that trains workers for a consortium of oil companies.
Training is expensive While there's a slight uptick in the number of graduates from energy-related engineering programs, training this new generation to work in the field is another story.
"You're not going to take a petroleum engineer right out of college and say, 'Here's $5 million, go drill a well,' " Dittman said.
Companies can spend as much as $500,000 on training for an employee over a 10- to 15-year career. It takes three to four years or more to train an entry level hire to replace a geologist with that much experience, according to the UH-Boyden study.
Companies lure some workers out or retirement to fill the experience gap, but they don't come cheap. Many are hiring on for hourly rates much higher than they earned as regular employees.
Gordon Duff, a senior recruitment officer with Addax Petroleum, said his company has come to OTC for the past two years in search of full-time engineers with deepwater drilling experience but has largely had to settle for hiring Houstonians as consultants. "You have to be more flexible if you want to get the experienced workers you need," Duff said.
And U.S. companies can no longer count on finding experienced American workers to fill key leadership positions overseas, said David Dunlap, chief operating officer at Houston-based oil-field services firm BJ Services.
That means services companies will need to devote more resources to training workers from the regions where they do business.
Tackling the problem This year's OTC is looking to address the problem in several ways.
On Thursday, for the second year in a row, OTC is holding its Next Wave program, a series of speakers and discussions aimed at workers under 35.
Also Thursday the show will host the Energy Education Institute, where 75 area teachers of kindergarten through 12th grade will take part in workshops on getting science, math and energy topics into the classroom.
Ayewale's visit to the OTC conference was brief — he had to be back on the job off the Louisiana coast by 5 a.m. today.
He didn't have time to set up any interviews but he didn't leave empty-handed, as he dragged a set of golf clubs he won in a drawing at Chevron's recruitment booth.
"That's not too bad," he said.
Chronicle reporter Brett Clanton contributed to this report.
tom.fowler@chron.com
And the comments on the hiring boom sounded right out of the tech hiring boom of the late 90's, when fresh techie graduates were getting $10,000 signing bonus and fistful of stock options - the sign of the time (at that time) for me was seeing even Pizza Hut offering $500 signing bonus for new delivery drivers :)
Don’t worry... The Dems will stop this. Shut down the oil industry. Let illegal aliens fill these jobs for 20% of the wage.
“As it has been for several years, the worker shortage”
Sounds more like a “wage shortage.”
You should see what I leased my ranch for. I was almost embarrassed. One section leases. Continuous development clauses. Cash on barrelhead.
I was studying to be a petroleum geologist in the early 1980s, and looked forward and saw there would be no jobs when I graduated, nor in the forseeable future.
The current sellers' market for workers has its roots in the mid-1980s oil price crash, when companies cut work forces drastically. The petroleum industry lost almost half a million jobs between 1982 and 2000, according to the American Petroleum Institute.
Oil-related engineering courses fell out of fashion as students seeking technical degrees were lured into software development in the early 1990s and Web development in the late 1990s, French said.
The danger of chasing "what's hot" in the job field RIGHT NOW, one is always behind the curve ....
One of my college friends entered the geophysics/oil field in 86’ managed to stay afloat and then partnered with a couple of people and started their own exploration co. a few years back. He’s tonning it right now.
Better bring in some H1Bs to cut those salaries. Except for the management, of course.
Biggest event in many, many years.
Overflow of exhibitors are outside and for the first time inside Reliant Football Stadium.
...my feet still hurt from all the walking yesterday.
And all the topless bars on the Richmond strip are re-joycing :P
Chinese equipment is flooding the market.
It is cheap and these companies now have their API, American Petroleum Institute, certifications which positions them to successfully market to the US onshore and offshore drilling companies as well as upstream production companies.
That's not to say the bars and clubs aren't packed.
But the companies are a whole lot more aware of liabilities of bad press and alcohol related incidents at their functions.
Thanks for posting this!
oilfields ping
I almost feel sorry for the kids starting out today in the industry. It will be so hard for them to not get caught up in high living with today's salaries. I've got nearly 2 decades in it and I have never seen anything like it. But it will come to an end, eventually.
But I am enjoying the competition for us in the market and working hard to keep the good people I have.
ping
If I can get away I am going to OTC tomorrow.
Big if............
I can’t help but think about TexasCowboy as I read this article. I miss his phone calls.
TC bump
Wish he could be here to ride out this last boom...
I bought everything I could buy circa 1998. Oil was at $9 and going to $8. Some pencil-neck at Exxon said under $10 for the next 20 years or somesuch.
Sold about half last year. Oil was $70.
Exxon’s my by-atch.
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