Layoffs have graduates questioning a future in oil
Students enrolled in energy programs are thinking twice
HOUSTON — Six months ago, a degree in petroleum engineering was a ticket to a job with a six-figure salary. Now it’s looking like a path to the unemployment office.
The oil crash that’s forcing companies to slash billions from their budgets and cut tens of thousands of workers is derailing an industry campaign to attract top college graduates.
It comes at a time when the future of drilling is increasingly tied to new technology that lets companies pull more oil and natural gas from the ground, faster and cheaper.
Young people who swarmed to newly designed energy programs at schools from Texas to California are now questioning whether they can count on crude for their future, according to interviews with students, counsellors and company officials.
“It’s time for me to do a reassessment of how I plan to begin my career,” said Vince Miller, a senior at Ohio State University studying chemical engineering and president of the school’s Society of Petroleum Engineers chapter. Miller spent the summer working as an apprentice field engineer at a drilling site in North Dakota, and has watched anxiously since then as jobs evaporated.
Rohail Ullah, a sophomore majoring in petroleum engineering at Texas Tech University in Lubbock, Texas, spent part of his winter vacation talking with family and friends about whether the oil business was still the right choice as crude prices plunged 44 per cent in the fourth quarter.
“What was going through my mind was: Is this going to give me the opportunity that I’m trying to seek?” he said.
Enrolment in engineering programs aimed at the oil industry soared during the past decade — jumping by more than 70 per cent at Texas A&M University — as the shale boom brought explosive growth to energy companies across North America.
In the past five years, engineering rolls doubled at Colorado School of Mines, according to school data.
Competition for scientists and engineers drove up salaries, with topranked new graduates making as much as $130,000 a year.
“It’s one of the highest paying careers right out of college,” said Waleed Akram, a junior studying petroleum engineering at Texas A& M, who’s not yet ready to turn his back on the possibility.
Historically conservative companies like Exxon Mobil Corp. strove for the “cool factor” by flocking to social media, opening Twitter accounts and even creating Vines — the micro-clip videos that have become an essential part of teenagers’ Internet language. Baker Hughes Inc., the oilfield service company, developed a drilling-inspired smartphone game modelled after Candy Crush.
Despite these efforts, the oil bust has brought back the jolting reality of a volatile, commodity-based business, said Amy Myers Jaffe, executive director of energy and sustainability at the University of California at Davis. In a tight competition with Silicon Valley for the best and brightest, any disadvantage can hurt, she said.
“A lot of top candidates will go into other industries and they won’t be able to get them back,” Myers Jaffe said.
“If you’re good at math and science and you’re seeing that there’s going to be more jobs if you major in computer science, then you’re going to pick computer science.”
The 59 per cent collapse in crude prices since June has sent oil companies into a downward spiral.
The Standard & Poor’s 500 Oil & Gas Exploration & Production Index fell by 32 per cent over the same period as investors anticipated losses and oil executives began planning for the worst.
More than 30,000 layoffs have been announced across the industry as companies slash budgets, according to a tally by Bloomberg News. Exploration and production spending is expected to drop by more than $116 billion, a 17 per cent decline, because of falling crude revenues, according to an estimate from Cowen & Co.
Even amid the cutbacks, oil companies aren’t abandoning their recruiting efforts, mindful of how hard it is to get the ball rolling again.
Exxon is continuing its marketing blitz targeting young people, including a social media and website campaign called “Be An Engineer.” And it hasn’t stopped its campus visits, said Scott J. Silvestri, an Exxon spokesman.