‘I never envisioned this’
Energy workers jolted by swift and brutal turn of circumstances as oil industry reels from plummeting prices
On a recent weekday morning, Maisam Otoum and his daughter arrived at a Houston park amid a fever pitch of humming cicadas to find they had the playground all to themselves.
“C’mon daddy,” 3-year-old Lamar said, grabbing his hand and shepherding him from the empty swings to the monkey bars.
Since losing his job in March crunching seismic data for a local oil services firm, Otoum has embraced the chance to spend more time with his daughter. He’s willing to follow an eager Lamar down the slide, and he has become a quick fixer when a barrette slips from her brown curls.
Otoum thought the stay-athome dad gig would be temporary. But the 29-year-old is wondering whether he will ever return to the energy business where he once saw himself as a rising star. He has submitted more than 150 job applications with no luck.
“I never envisioned this,” he said.
The prolonged slump in crude oil prices has forced thousands of people out of work across the country. Laid-off energy workers in Houston, home to some of the world’s largest oil and gas companies, are facing difficult choices about their future in an industry punctuated by booms and busts.
Take a job with less pay? Switch careers? Leave Houston to chase work in another market?
Those who hold out for an energy job could be in for a long wait. The number of oil and gas job openings globally dropped in half from 24,000 to 11,600 from November through July, according to OilPro, a Houston industry network that tracks hiring trends.
Companies that are still hiring are offering mostly temporary contracts without health insurance or retirement packages. Gone are the days of signing bonuses that could reach $100,000 and hefty stock options.
Oilfield Helping Hands, an 11-year-old Houston nonprofit
dedicated to helping oilfield workers in crisis, has seen a new and disturbing pattern: Applications have doubled and most are from people who have lost their jobs.
Severance packages can only last so long, and crude prices hit six-year lows in recent days.
“There’s an air of desperation,” said Tobias Read, CEO of Swift Worldwide Resources, an oil and gas staffing firm.
Wendy Post of Houston was earning $91,000 per year working for an independent offshore surveyor’s group before she was let go in mid-June. She cares for her 24-year-old son, who requires regular treatment for a genetic disorder.
Post is scrambling to figure out what sort of job she can get. Otherwise, she says, it won’t be long before she can’t pay her utility bills.
“It’s not like I have someone there to say, ‘Oh honey, it’s going to be OK. We’ll manage. We’re just not going to go to Jamaica this year,’ ” she said. More layoffs, waiting
The dramatic reversal in energy workers’ fortunes has been swift and brutal, drawing comparisons to the rash of energy job losses that defined the ruinous 1980s bust that rocked the city’s economy.
“If you’re someone who’s been here five years and all you’ve seen is boom, this is hard to swallow,” said Patrick Jankowski, senior vice president of research for the Greater Houston Partnership. “If you’ve been here 25 years, … this is your third or fourth rodeo.”
But some veteran energy workers with extensive résumés say they are surprised by the struggle to land new positions.
Cliff Wall, 53, started as a roustabout on a Louisiana barge rig in 1978, working his way up to rig superintendent for the Houston-based deep-water driller Diamond Offshore Drilling. After losing his job in mid-March, Wall retreated to Lampasas with his wife, splitting his days raising donkeys and sheep on his 70-acre ranch and filling out more than 200 job applications.
Wall had lost jobs during previous downturns but quickly found work again. This time feels different, he says, landing only one interview in five months.
“I have started over in the oil field before. I’m sure I could do it again,” Wall said. “I have faith that the Lord has the right job out there.”
During the past eight months, energy companies have slashed more than 176,000 jobs worldwide, although the number is likely greater because many aren’t made public.
The U.S. has seen at least 91,000 job cuts across the energy industry since prices collapsed last summer, according to Continental Resources, an Oklaho- ma oil company that tracks layoffs. The number of cuts in the Houston metro area is unknown but believed to be in the thousands.
The frenetic hiring spree that defined the heady days of the shale oil boom came to a screeching halt in late 2014 after Saudi Arabia and other members of the Organization of Petroleum Exporting Countries announced
“If you’re someone who’s been here five years and all you’ve seen is boom, this is hard to swallow. If you’ve been here 25 years, … this is your third or fourth rodeo.” Patrick Jankowski, senior vice president of research for the Greater Houston Partnership
they would not reduce oil and gas production despite a global supply glut.
Initially, the industry treated last year’s dip in oil prices — from $100 a barrel for domestic benchmark crude to below $55 — as a temporary problem that would soon right itself. When prices didn’t bounce back, the largest oilfield services companies responded first, with Halliburton, Schlumberger, Baker Hughes and Weatherford slashing thousands of jobs across the globe.
In July, however, oil prices began plummeting again, reaching a new sixyear low of $40.45 a barrel Friday and prompting more cutbacks. Chevron began issuing pink slips as it works to slash 1,500 jobs, including 950 in Houston. Royal Dutch Shell revealed that it’s axing more than 6,500 jobs worldwide, including some that have already been cut.
More than half of the 200 oil and gas employment managers surveyed said they are scaling back their hiring this year, according to a June survey by Rigzone, a Houston-based company that publishes energy-related news and job openings.
“There are two things the industry doesn’t like — low (oil) prices, but worse than that, volatility,” Read said.
Toby Dodd, 40, was once a deep-sea diver, inspecting and repairing offshore platforms and pipelines. More recently, he was working as a project manager for offshore services company Bisso Marine, when he was let go earlier this year.
The oil and gas business is all Dodd has ever known, but after receiving more than 50 rejection letters, he decided to take a break from his job hunt to work on a family ranch north of Houston.
“I would love to stay in oil and gas, but if the work ain’t there, the work ain’t there,” he said. Small firms cutting, too
Shirley Fuller recalled Flow-Tek management assuring her early in the year that her job as a purchasing assistant with the company was safe.
By March, she was sitting at one end of a long, blank conference table, her stomach twisting in knots as the human resources manager passed her a dismissal letter. Fuller’s boss escorted her to her car. She thanked him for the opportunity.
The minute she left the parking lot, she collapsed into tears. “I didn’t want anyone to see me cry.”
Layoffs at big oil companies and major services firms command the most attention, but the smaller, private manufacturers who churn out valves, drill bits and steel pipe also have been struck by the oil collapse and have been quietly scaling back. Over the past year, Houston has shed 9,300 durable goods manufacturing jobs, many tied to energy.
Within hours of losing her job, Fuller had updated her résumé, filed for unemployment and sent out job applications to a wide range of energy firms. She would have a better chance finding a job in a different industry — health care, construction, retail — but oil and gas companies tend to pay better. She earned $45,000 at Flow-Tek, an attractive wage for someone with an associate degree.
On average, energy jobs in Houston pay about $200,000 per year with benefits and other perks, nearly three times the $70,000 the typical wage earner takes home, Jankowski said. “It would be very difficult to find something outside of oil and gas that pays as well.”
In the four months since she was let go, Fuller scored only one interview at an energy-related firm. A recruiter assured her that she had the skills and experience, but she never got a call back.
Like so many who have lost their jobs, Fuller has had to scrape, hustle and compromise to get by. She stopped eating out and she no longer takes her five children to the movies.
She accepted a $10-perhour job overseeing scheduling, purchasing and customer service at a friend’s appliance repair shop. On weekends, she drives for Uber, ferrying bar-hop- pers around downtown for an extra $100 to $300 per week.
“I have had to max out my credit cards and use up all my savings, too,” she said. “It’s been terribly frustrating and emotionally draining.” Taking less
Eight months after the layoffs began, many energy workers continue to hold out hope for a job in an industry famous for its high wages, bonuses and attractive perks.
Wage growth has slowed dramatically, and in an effort to protect salaries, some companies are cutting benefits instead.
“These companies have layered on benefit upon benefit because the com-
“The job market is so tight right now, especially for technical professionals in oil and gas. Whenever I apply for a position out there, I find out another 100 people did too, including some of my friends.” Maisam Otoum, 29-year-old who lost his job in March crunching seismic data for a local oil services firm
petition for talent has been so tight for years,” said Jeff Bush, president of CSI Recruiting. ”They’re looking at it now, and something’s got to give.”
Contract workers have been hit particularly hard, forced to take multiple cuts to their day rates. And many companies are only hiring contractors, refusing to take on permanent employees while oil prices remain so low.
“What we’re seeing in the direct-hire marketplace is an almost complete annihilation,” said Read of Swift Resources.
Alex Bolaños, 31, was weeks away from his wedding in May when Houston oil company Linn Energy eliminated his job as part of a broad range of cutbacks in the company’s shale drilling business.
Soon after, a company offered him a six-month contract. But between the wedding planning, the honeymoon to Europe and another opportunity to interview for a full-time position with a different company, Bolaños delayed accepting the offer.
He soon regretted the decision.
The company offering the contract job rescinded its offer. Then, the other company decided not to fill its full-time opening.
When his wife found out she was pregnant in June, Bolaños’ job search took on a new urgency. Eventually, he accepted a temporary job at another Houston exploration and production company for less than what he was making. He hopes that he can parlay the position into something permanent.
“I need income,” Bolaños said. “Linn helped me out a lot with a severance package, but there’s only so much housework you can do.” Tough for specialists
Workers with specialty positions, such as petrophysicists and reservoir engineers, have struggled to find new jobs. They are either locked in a fierce competition for the rare job that fits their skillset or they discover their experience doesn’t translate well with another industry.
Otoum, the stay-athome dad, had spent more than two years training to become a geophysicist, landing a coveted internship at Exxon Mobil and securing an H1B visa to work in the United States. But the experience that once made Otoum a standout now limits him when seeking work elsewhere.
“The job market is so tight right now, especially for technical professionals in oil and gas,” Otoum said. “Whenever I apply for a position out there, I find out another 100 people did too, including some of my friends.”
Because Otoum’s stay in the U.S. was tied to his job, he had to find another employer willing to sponsor his visa. That didn’t happen, so Otoum and his family have returned to their native Jordan.
“For us, everything we know as a life is here,” he said.
With the downturn lasting longer than many expected, some energy workers who have jobs are getting nervous, looking for new work that may bring more security.
“There’s nothing there,” said a longtime manager at Transocean who asked not to be identified because he didn’t have his employer’s permission to speak to the media.
As oil prices continue slipping, he wonders about his future at the company. He said he could see the day when his entire department could be cut, putting him and scores of his colleagues out of work in one move.
Nobody at the company, or anyone in energy for that matter, is resting easy these days, he said.
“Everyone’s walking on eggshells.”