What Will Happen to Experienced Oil, Gas Workers?

What Will Happen to Experienced Oil, Gas Workers?
Rigzone's worker exodus survey finds that highly experienced oil and gas professionals are struggling with whether or not to return to the industry in the wake of a new normal.

Nearly one-third of respondents to Rigzone’s worker exodus survey are highly experienced (having more than 20 years of oil and gas experience). This group of industry professionals has been quite vocal about how they feel about leaving the industry – either voluntarily or involuntarily.

Some have decided to leave the industry due to disappointing job opportunities or an uncertain future with volatile commodity prices. Several have gone as far as to swear off the industry altogether and warn newcomers against entering into the world of oil and gas.

“As long as we have workers willing to learn and put their skills to use, they will be hired. There is no room for complacency; workers need to adjust to change.”

Fifty-two percent of Rigzone’s respondents with more than 20 years of industry experience are currently unemployed, having most recently worked in oil and gas. Almost half of these people were the victim of a layoff within their company. Yet 83 percent of them are still actively looking for employment in the oil and gas industry.

Glory Days Are Gone

Many experienced job-seekers have reached out to Rigzone, expressing frustration with employers, claiming they were pushed out to make room for younger and cheaper labor.

However, Regina Mayor, U.S. and global energy sector leader for KPMG, doesn’t see this as the case.

“My perspective is that less experienced resources have been cut to save more experienced resources,” Mayor told Rigzone. “Oil companies have favored experience and performance during the downturn … they have tried to use this down cycle to create a high-performing culture and use previous performance and experience as the key indicator for retaining resources.”

David Hsieh, an oil and gas professional with 35 years of industry experience, was laid off (he was asked to sign a termination agreement) during the most recent downturn and he says this low cycle is much different than past ones.

“I chose to retire after working as an expat in China for 18 years and there was no hope of a firm recovery,” he told Rigzone. “I am one of the lucky ones that enjoyed the glory days of big oil and my own frugal lifestyle to have plenty to retire at age 58. I did not actively look for employment and didn’t focus in my old field, but feel the combination of my 35 years’ experience and seniority give the recruiters excuses to bypass me.”

Having survived the energy crises of the 80s and the financial crisis of 2009, Hsieh maintains this down cycle is more than a “severe winter.”

“The upstream oil and gas industry recovered within a year each time even though many of us in operations were removed from the payroll,” he said. “The world had never experienced such a drastic collapse of an industry and this is more like an ‘Ice Age’ of the petroleum industry in my opinion. The glory days are gone!”

Life After Oil and Gas

Some workers found greener pastures in other industries after being laid off from oil and gas. Twenty-year oil and gas veteran Reinel Solano is one such person, who used his severance money to purchase his own Floor Coverings International franchise in Houston. Solano, who was a reservoir engineer, has since hired two full-time employees and employs five crews of contractors. Though he said managing a business doesn’t come without its stress, he enjoys the work. Still, returning to oil and gas is a possibility.

“I would like to have my company more established and with a staff that can sustain itself; then I would consider going back into the oil business,” Solano said.


12

View Full Article

Valerie is an experienced writer and editor dedicated to providing useful and relevant career news about the oil and gas industry. Email Valerie at valerie.jones@rigzone.com

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Alexander Teesdale | Sep. 22, 2017
Tom Carrens, Nick Edwards, Pete Tarver to name a few have expressed very sobering comments indeed, both credible and ‘on the money’ too. See, that’s what it’s all about – money! Oil companies, just like any other business, are always looking for ways to reduce costs because that’s an obvious and natural function of the economic viability of any company, perhaps more so in the especially competitive and volatile market O&G. But the problem stems from the pathologically unbridled avarice they go about doing this at the expense of so many experienced souls. Young educated intelligent people are always needed in every industry but should not be a substitute for experienced people because of the financial advantages associated with their hire. There is no substitute for experience! Would you prefer your medical practitioner to be in their mid-twenties? Would you want your stock investment advisor to be fresh out of college? Would you not expect people in highly responsible places of all manner of public and private office to be experienced; the police, emergency medical response, the fire department, your airline pilot, your university professor? Or would you perhaps be satisfied with whomever the HR department sent along because they were the cheapest option. All rhetorical questions of course since the answers are reasonably self-evident. The question remains; ‘What will happen to experienced Oil and Gas workers?’ In my opinion I feel that as long as unsustainable immediate financial gain is placed over long-term investment i.e. experienced employees (HR take note), we are going to see huge swathes of experience lost forever. Also, do we need to consider the puerile and patently inconsistent comments on our industry from financial auditors or tax advisory personnel just because they have ‘U.S. and global energy sector leader’ in the title of their job description? I’ve given my dog that same name but he just says ‘woof, woof’. Geddit? To these people I advocate the advice by Usarsupthai, “the nearest thing to the oil business should be pumping gas in your car”. To contributor bshaef I would suggest you try commenting on the discussion topic and refrain from crowing about your incredibly good fortune whilst the rest of us watch our entire careers evaporate before our very eyes! You could have simply written a one-line response; ‘I’m alright Jack’.

Shane Clark | Aug. 21, 2017
I have recently been seeing more advertisements for offshore jobs in the GOM, unfortunately the Companies and the Goverment have turned their back on the US Offshore workers in favor of cheaper foriegn labor, giving the jobs to the foreigners. I work in the Offshore Construction/PipeLay/OSV Market, and seeing that most of the job postings for work in the US Gulf of Mexico is being advertised as searching for persons holding current B1 type visa. For example V Ships recently had advertisement they are hiring all positions for the Goliath that has job in USA but only targeting foreign crew. Sad to see that the visa system is being abused and the oil companies selling us out, especially while so many fellow offshore brothers are struggling to find work!

Ronald Jackson | Aug. 20, 2017
I have had a good 28 year career working onshore /offshore in the oil and gas industry, during that period I have been requested to educate or survey local blasting painting work force in different countries. My discipline is Painting/Insulation inspector, after each group were proficient to carry out the work, or a local Inspector was hired at fraction of my salary, my contract was terminated, I am at a mature age, but still hold a valid CSWP/BGAS Grade 2 painting inspection certificate and am willing to take a new contract. There is always a need for experience, it can be short sighted and costly when premature failures occur.

Nick Edwards | Aug. 19, 2017
We can bump our gums all we want about our feelings of being short changed for someone cheaper or replaced by an individual with ridiculously less experience than yourself but the reality is that the oil companies keep making the same damm mistake with every downturn and they have always gone for low cost / youth over experience. They aint going to change now! Its only when you have an old head working alongside a new starter that the obvious gap in productivity and optimisation becomes painfully obvious for all to see. However if the inexperience goes all the way up the line on an operation run with a bunch of second class players right across the team,the bar is automatically set low and this then becomes the new norm, mumbling their way through all the issues...,these guys then become the next generation of people to start bitching when the next down cycle comes along.Circles within circles, the cycle goes on and on adinfinitum. Its just the way it is....,face it ..,oil as a commodity is a dying industry and I feel that within the next 100 years or so it will be looked back on as we do now of steam and coal as fuel sources.Nothing lasts forever unfortunately.

Alan mchale | Aug. 19, 2017
Having been offshore the past 15 years I found myself redundant. I was always careful financially. But funds only last so long. Then certification runs out. The price of recertification never dropped!! Therefore I am finding that now I cannot afford a minimum of £800 BOSET PLUS £ 1000 re cert crane ticket £ 200 medical, and that is the very basic So Im now in a bind working construction instead of the job I love.

rather not say | Aug. 18, 2017
The real reason for layoffs is to pass corporate risk from the shareholders to employees. If the shareholders risk increase they respond by lowering the price they will pay for stock which directly impacts the CEOs bottom line because most of his pay comes from stock options. If the risk is transferred to the bond holder then he demands higher interest rates lowering corporate profits which lower stock prices which reduces the value of the CEOs options. But if they pass the risk to the employee in the form of layoffs the employee can do nothing that has any direct impact on corporation. In fact stock prices will either go up or not drop as much because stock analysis do realize that labor is less than 10% of operating cost in an integrated oil company and have no idea of the importance of experience and knowledge in the oil industry in keeping operating and capital cost under control. The CEO only has to be no worse than the others and is at the end of his career so he is usually cashed out when the cost of layoffs hit home a few years down the road. The industry management was planning to replace the layoff employees who left the industry with far cheaper H1Bs in the future when the shareholders began to demand they actual doing something to grow the company. However when the voters elected Donald Trump because he said he would drastically cut H1Bs this is creating a huge potential problem in the near future. This is why Trumps support among industry CEOs which you would think would be very high because of his pro energy growth policies is waning fast.

USARSUPTHAI | Aug. 18, 2017
Tom Carrens has a very good understanding how this gig works. The oil business has, and still is, creating their own demise. My advice to anybody that is thinking about entering this work should count on a lay off every 3-5 years. One way that might reassure longevity is to play golf. If there is one aspect of this industry is that if you play golf, meet the right people you just might survive a down turn. I know this sounds simplistic, however, over the 37 years in oil and gas I have seen so many people advance them selves by playing golf and meeting the right people. It used to be , when I broke out, it was the older experienced hands that were promoted to tech positions to assist those new guys in the field. Not so anymore, it has totally been turned the other way , a graduate with their new degree are placed in tech and supervision positions to supervise the 20-30 year hands. Bottom line advice for anybody thinking of this type of work is this; the nearest thing to the oil business should be pumping gas in your car, that was my advice to my grandson anyway.

Pete Tarver | Aug. 18, 2017
I agree with Tom Carrens comments. The oil & gas industry seems to be scared to rely on experience as a valid qualification. Since the Big Spill employers are requiring degreed engineers to fill positions that should be filled by experienced managers and supervisors who know what it takes simply because they have been there and done that. An oil or gas well is a machine and the mechanics of the machine can change from well to well. Its like requiring an auto mechanic to have a college degree because there have been auto accidents.

Tom Carrens | Aug. 17, 2017
I think Majors comments are off base. The real reason that the oil industry is is losing older workers is age, experience and pay discrimination. While this is technically unlawful, most companies have figured numerous ways around it. Companies do not want older, experienced and technologically astute drilling or completion superintendents and managers because company HR personnel and recruiters have developed programs that automatically kick out a resume no matter how good it is if it sees experience levels which is easily related to age, time frames or a particular phrase or words not used or previous compensation and benefits are higher than what is currently being offered. HR and recruiters also have another way they deter older workers and that is by deciding that they can not relate to younger workers or that they would not be happy working for someone younger ( how this is done without speaking to an applicant I dont know). Companies have also directed their HR and recruiters to include that prospects must be or have an engineering background but that is such a false assumption and requirement. Most engineers do not have the practical knowledge or field experience that it takes to the run the many facets of day to day operations or simply do not want to. Most engineers do not have a plan B or C or D ready in case an issue occurs, instead they rely heavily on outside sources to tell them what to do which is can be a life saver or extremely expensive because the source they are relying on may or may not have the experience either with a particular issue but can sell the company a plan that sounds good. Another issue today is that younger employees dont have the same work ethic as older persons do but they want the same or higher title and compensation. The oilfield IS NOT a 5 day, 40 hrs per week job, it is a 24 hr a day, 365 days a year job! While it is very true that todays wells are more complex, require sound and new engineering ideas, techniques and equipment, it is also true field operations have not been automated such that say a 20 stage 10,000 horizontal frac job can be accomplished by sitting in a command office and punching button, It still takes numerous people and service companies to accomplish. Older experienced managers and superintendents can logically organize the project, provide a plan of action, execute the plan and have contingencies in place in case something arises. Good managers and superintendents are able to understand the project from an engineering, economic and practical perspective and are able to convey or help convey those ideas to others They also provide continuity between departments, upper management, field personnel and work to ensure that all of these functions are done safely, within regulatory rules and regulations, accepted industry standards and guidelines. Younger workers are deterred from entering the oil industry because of its unstable nature, they actually have to work, live where the work is which a lot of times are in areas that are small, rural, hot or cold, windy and dusty, the work is dirty, the hours can be long and, they far from family and friends. One can spin the oil industry story numerous ways but this is the way it really is and there ARE numerous talented individuals that have been laid off that are wanting to continue to work, be a contributor, to teach and guide younger people in pursuit of their chosen field and dream. The oil industry is not going away anytime soon, nor are the practical and common sense approaches to getting the job done.

bshaef | Aug. 17, 2017
I started in the industry in 1963 and my first layoff came in 1986 when the company was sold. I got one crummy year of severance. After that I consulted and/or was an employee of several unsuccessful companies but I picked up another five years of severance checks in the process. In 2005 I fell into a company that accidentally found out it was sitting on a huge shale gas play. I made more money between 2007 and 2013 (when I retired) from a combination of stock options and an awesome 401K and a 20% bonus deal. In 2005 was savings were in the 5 figure range, now they are in the low 7 figure range. Three cheers for shale and Aubrey McLendon. He did a fabulous job publicizing his shale plays which include ours. Ill make no bones about it, I am luckier than smart because I just happened to be in the right place at the right time.


Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE

More from this Author
Valerie Jones
Senior Editor | Rigzone
 -  Harvey Strikes Employment: CB&I Lays O... (Sep 25)
 -  Women's Panel Shares Career Struggles,... (Sep 22)
 -  Survey: Maritime Leaders Weigh In On T... (Sep 18)
 -  Web Platform Launches to Match Oil, Ga... (Sep 13)
 -  Q&A: Three Women Detail Life Working O... (Sep 12)


Most Popular Articles

From the Career Center
Jobs that may interest you
HR Training Coordinator
Expertise: HR - Trainer / Instructor|Process Technician|Safety Training Rep
Location: Beaumont, 
 
HR Analytics Specialist
Expertise: Financial Analyst|HR - General
Location: Dallas, TX
 
Human Resources Call Center Representative Job
Expertise: Customer Service|HR - General
Location: Minneapolis, MN
 
search for more jobs

Brent Crude Oil : $59.02/BBL 3.79%
Light Crude Oil : $52.22/BBL 3.07%
Natural Gas : $2.92/MMBtu 1.31%
Updated in last 24 hours