Published by the American Geological Institute
and Trends in the Geosciences
After creeping up steadily, the price of oil hit $34 a barrel March 6, a nine-year high, and continued to climb. It’s clear what the increased prices mean for consumers of gasoline, diesel fuel and heating fuel. But what do they mean for geoscientists looking for jobs in the oil industry?
“From our perspective, we’re just going to stay a steady course,” says George Sayre, a recruiter for ExxonMobil Exploration Co. Some major companies have adjusted hiring trends in the past with the erratic cycles of oil prices. But many, like ExxonMobil, are now focused on hiring only enough geoscientists to replace those who will soon retire. It’s better to hire people you know you can keep for the long term, Sayre says. “We’re hiring for demographics. I wouldn’t say that we’d see significant ramp ups in hiring efforts based on the price alone.”
The OPEC and non-OPEC countries that produce most of the world’s oil started production cuts in March 1998, responding to record-low prices. Since then, demand for oil has increased. Now the world consumes 2 million barrels of oil a day more than it produces, U.S. Secretary of Energy Bill Richardson testified March 1 to the House Committee on International Relations. His statement outlined the Clinton administration’s strategy for dealing with volatile oil prices. Richardson met with representatives from OPEC nations in advance of the March 27 meeting of OPEC member nations in Vienna, Austria, to discuss production levels.
Domestic production in the United States can’t offset the supply and demand discrepancy for the U.S. market. The recent price increase is another reminder that U.S. production does not control the price of oil. One reason is that most U.S. sources are mature. “The U.S. fields have been producing for a very long time. There’s just not that much crude oil around, and it’s more expensive to get it out of the ground,” says Neal Davis, an analyst with the Energy Information Administration.
One result of higher cost is that more oil companies are pursuing global exploration opportunities — shifting opportunities for new jobs overseas. “We want to be a global company, so the work force needs to be global too,” Sayre says.
Competition for capital from “dot-com” companies, a spate of large mergers (such as the merger last fall of Exxon Corp. and Mobil Corp. into ExxonMobil Corp.), new technologies that make it possible for one person to do the job three people used to do — these trends also play into the employment picture, and the volatility of oil prices doesn’t help.
“What it all boils down to is where it stabilizes,” says Barry Jay Katz, a research scientist with Texaco Inc. and chair of the Committee on Research for the American Association of Petroleum Geologists. “From what we’re seeing right now, no one has the confidence to just go out and start expanding.”
But, Katz adds, if the price stabilizes in the mid-20s through the year, employment might experience an upswing.
John Spears, president of the petroleum industry market-research firm Spears and Associates Inc. in Tulsa, Okla., offers an optimistic view of the recent price trend. “Operators are going to take this increased cash flow and turn that into budget for research and development,” he says. “The higher prices are good news for geoscience employment.”
Hiring has increased compared to a year ago, when many geoscientists lost their jobs in the wake of record low oil prices, says Tom Robinson, president of Energy Search Consultants in Tulsa, Okla., a head-hunting company for the petroleum industry. But much of that hiring, he says, is by smaller companies: the mid- to small-sized independents. The larger companies are replacing employees who have retired or who were laid off, but they’re not adding staff as these smaller companies are, Robinson says.
Sayre also advises geoscientists to give such companies closer looks, as they often buy the properties the larger companies sell in mergers.