Tue, Sep 04, 2007 page10

• Petroleum engineers in hot demand

  • AP
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  Petroleum companies are trying to hire thousands of engineers to keep up with bustling oilfield activity and a growing number of retirees, and experts say the trend is expected to extend into the next decade as worldwide energy demand grows.

  Like star athletes, engineering students Julie Arsenault and Emily Reasor are prized prospects for the energy industry, which is experiencing dizzying demand for engineers.

  "I've talked to quite a few of my peers, and we know we're in a good spot," Cornell University's Reasor said as she and Arsenault, of the Massachusetts Institute of Technology, took part in a weeklong recruitment program sponsored by Royal Dutch Shell's US arm. "It's nice to know we're needed."

  Management consulting firm Oliver Wyman says roughly eight in 10 global oil and gas companies forecast a shortage of petroleum engineers through at least 2011. The American Petroleum Institute (API) said US energy companies will need at least another 5,000 engineers by decade's end.

  In Houston, home to scores of exploration, engineering and services companies, simply check the classified ads: Row upon row of job listings for engineers at ConocoPhillips, Marathon Oil Corp and numerous others.

  Petroleum engineers evaluate potential oil and gas reservoirs, work with geologists and other specialists to understand rock formations, determine drilling methods and then monitor drilling and recovery operations.

  One of their big tasks is to design methods that achieve maximum recovery of oil and gas.

  "I can assure you, it's tight from a supply standpoint, hot from a demand standpoint and lucrative from a job searcher's standpoint," said Cary Wilkins, who leads Shell's recruitment efforts in the US and Canada.

  hiring challenge

  No one in the industry appears to be panicking, but executives acknowledge the hiring challenge and some say it could impede investment in new oilfield projects.

  David Pursell, an analyst with Tudor Pickering & Co Securities Inc, said it's difficult to quantify what a hardship the shortage will be, but it's certainly a consideration when a firm mulls buying an existing project or starting one anew.

  "The first question from senior management is: OK, we've got the asset. Who's going to work on it?" Pursell said.

  "What you end up doing is stretching your people. You prioritize. So it's not all bad. It forces you to work on your best, most important projects," he said.

  Fossil fuels -- despite efforts to find and market alternative fuels -- will continue to be the world's primary energy source for the foreseeable future, making petroleum and other engineers vital for finding and extracting oil and natural gas from all around the world.

  And demand is only going to grow.

  The shortage of engineers has been caused in part by the upsurge in exploration and a wave of retirements from the large "baby boom" generation of workers who have spent 25 to 30 years on the job.

  API says low college enrollment in petroleum engineering and other majors that support the oil and gas business also is to blame -- in part because of the industry's reputation as an unreliable employer.

  After US oilfield employment peaked at 860,000-plus in 1982, companies slashed more than 500,000 jobs over the next 18 years as oil prices per barrel plummeted to the low teens -- compared with prices of around US$70 now.

  Those layoffs, an institute report said, "sharply curbed entry into the industry by nearly a full generation."

  But college enrollment numbers are improving as the industry aggressively touts the potential for challenging work, exotic postings and starting annual salaries at US$70,000 or higher.

  The number of undergraduate students studying petroleum engineering at Texas A&M University has jumped from 191 in 2001 to 507 last fall, including 52 students at a new satellite campus in Qatar. A&M's petroleum engineering school had 1,422 undergraduates in 1982.

  targeting the young

  "We're talking about energy to the very youngest students," said Margaret Watson of the Society of Petroleum Engineers in Texas. "For a long time, we did a lot with high school students, but we realized we needed to go younger to make sure kids were taking the math and science courses they needed."

  Companies are using a variety of methods to grab and retain new talent.

  Houston-based Stress Engineering Services Inc, whose ranks have grown from 150 five years ago to 240, instituted in 2005 an Employee Stock Ownership Plan, a stake in the company previously limited to higher-ups.

  "It's not only a good way to attract people but also to retain them," Stress Engineering president Joe Fowler said. "We don't lose many people."

  Shell began its recruitment program, called the Gourami Business Challenge, in Europe more than 10 years ago before exporting it to the US in 2005. This year Shell doubled the number of students involved to 90.
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