In just over a year, the price of oil per barrel has dropped roughly 60% from June 2014. Last month the price of U.S.-produced West Texas Intermediate hovered in the mid-$40 per barrel range. As anticipated, many job cuts have occurred subsequent to the notable drop in prices. Industry experts have observed the majority of these cuts in the oil field service industry. Service industry firms typically provide oil and gas producers with drill bits, well casing, hydraulic fracturing pumps and other related technology. Reaching nearly 196,000 total petroleum industry layoffs worldwide, late in the third quarter of this year, the energy sector is being flooded with available and often highly skilled talent.
The current wave of layoffs has affected the U.S.-based shallow water oil drilling barges, many of which have already sat docked in harbors such as the Port of Iberia in Louisiana for the better part of this year. However, deepwater drilling efforts around the globe continue as exploration and projects, green-lit prior to the recession, continue. Opportunities for workers may exist on Jack-Ups, Semisubmersibles, and Drillships; however workers on these rigs must consider whether or not the rotational schedule and extended time offshore are right for them. The positions available on these rigs vary widely across several areas from maritime, and ship maintenance to drilling and administrative roles aboard the rig. Those more highly skilled positions may garner workers higher pay, even with a larger volume of experienced workers in the labor pool. However, those willing to transition to a maritime environment may earn higher wages still, than those seeking work on dry land, especially with regards to the more highly skilled positions.
Similar to the maritime environment, rural communities also have a limited number of highly skilled positions for which talent remains in high demand. These rural areas face a chronic talent shortage with regards to highly skilled workers across all sectors. This influx of talent into the oil and gas sector has prompted these companies, with operations in the rural areas of North America, to recruit proactively available talent who are willing to relocate. Those workers who are not willing to relocate may transition to other jobs within the energy sector to continue to utilize their particular set of skills. In Alberta, Canada those seeking employment are being encouraged to consider positions within the healthcare and agricultural fields as layoffs continue in the oil and gas sector.
Analyst speculation is prompting fears that these young and highly skilled individuals may choose to leave the oil and gas sector altogether when seeking employment as a result of a layoff. Opportunities for these workers exist not only in other energy sectors, such as solar or renewable energy but outside of the energy field altogether. Though most of the staff reductions have come from oil field service firms thus far, oil producers may spur the next wave of layoffs, say analysts. Loss of this young talent now could stifle oil and gas hiring when the market rebounds and companies are seeking to fill positions, not only in the oil field service industry but oil production as well.
While others in the job pool may choose to leave the energy sector altogether (an industry that does not typically offer part-time engagements or other strategies which could prevent layoffs). This migration of skilled oil and gas talent from the oil and gas sector has some analysts concerned about the future of the oil and gas industry. As the specialized and experienced workforce age out, there will be a very limited number of young skilled workers to take their places or train into their positions. This could have a detrimental effect on the industry as a whole and create a severe talent shortage in the future, especially in regards to the oil producers and oil drilling related engagements in North America.