Wednesday, August 10, 2011
Dow Jones Newswires
NEW YORK
by Steve Gelsi
Despite a big drop in oil and stock prices in recent days, U.S. energy companies bearing down on the country's shale fields have yet to waver from plans to add staff this year to boost domestic production.
The industry is hiring as it brings new U.S. supply on line and demand grows from power-generation companies switching to natural gas from coal or fuel oil.
"Our industry is competing for talent," said Jim Haynes, vice president for U.S. operations at Spectra. "We continue our hiring mode."
Spectra Energy, for example, expects to add staff as part of plans by the pipeline firm and its affiliates to add up to $10 billion in infrastructure in the next five years.
The Independent Petroleum Association of America projects as many as 200,000 new jobs in the energy patch from hundreds of oil and gas producers in 2011.
"I don't think the threat of a double-dip recession will stop many companies from hiring," said Jeff Eshelman, spokesman for the trade group of oil and gas producers, once known as "wildcatters."
"Overall, the natural-gas industry is one that is adding people, not scaling back," Haynes added. "We've seen at least a 15% increase, industry-wide, over the past several years, even during the downturn." Last year, Spectra hired 130 people and it's already brought on about 129 this year.
Dave Pursell, managing director and head of securities for Houston-based research firm Tudor Pickering Holt & Co., said an analysis of shale-gas fields in the United States revealed that nearly all remain profitable with oil at $80 a barrel or less. On July 25, oil was still $100 a barrel; on Tuesday, crude futures rose 1% to $82.
"The velocity of the drop has gotten people's attention," according to Pursell. "But companies aren't going to change their strategic hiring based on a two-week move in oil."
To be sure, the industry contracted during the 2008-09 financial crisis as it became more difficult for companies to get funding for their drilling programs, but so far, that doesn't seem to be happening, he said. The 2008 crisis, for instance, saw a much steeper drop in natural-gas prices than now.
Engineers wanted
While the U.S. jobs figures for July came in better than expected, the overall picture for employment remains moribund -- outside of the energy sector.
Among the hotter areas for employment growth: Some 50,000 job additions this year are expected for the Barnett shale of Texas, and 48,000 in the Marcellus shale of Pennsylvania, West Virginia, Ohio and New York, according to the IPAA.
Besides the Barnett and Marcellus shales, U.S. energy companies plan to beef up rolls in the Haynesville shale of Texas and Louisiana, the Eagle Ford of South Texas, the Bakken of North Dakota and Utica formations of Ohio.
Hiring activity also has picked up as natural-gas firms focus on more labor-intensive oil drilling; plus, companies need to drill to hold acreage under most of their leases with property owners, Tudor Pickering's Pursell pointed out.
Another incentive to drill is to get higher-priced Louisiana sweet crude, which fetches a price near the Brent crude level of $100 a barrel, he said. "Companies are drilling because they want growth. And drilling for oil still makes money with oil below $80 a barrel in most areas."
Some of the most sought-after job candidates in the energy sector right now are petroleum engineers -- a specialization in charge of technology used to maximize returns from wells, according to Apache spokesman Bill Mintz.
"One area of concern in the industry is that a lot of petroleum engineers are in their 50s and expected to retire," he said.
Chip Minty, spokesman for Devon, said the company currently has more than 300 openings right now and no plans to curtail hiring.
"The swing we've seen in oil and equity prices does not have a bearing on our long-term operational objectives," he commented. "We do analysis as we put together our budget. We use market prices that are quite conservative. Even if oil and natural gas dropped below where they are today, we'd still be looking at wells that are economical."
Apache's Mintz said the independent energy company's ranks rose to 4,500 in 2010 up from 3,500 in 2009, and more jobs are coming in 2011. "We're continuing to hire. We've got a lot going on in all of our regions."
The company has been recruiting graduates from the Colorado School of Mines, Texas A&M University, Texas Tech University, the University of Oklahoma, University of Texas and the University of Tulsa.
Asked if Chesapeake planned to scale back hiring this year in the wake of Monday's big selloff in the equities market, company spokesman Jim Gipson said "nope," and referred to a local newspaper report about economic expansion in Oklahoma City, Chesapeake's headquarters.
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