Will USA Oil, Gas Jobs be Affected by a Drop in Shale Growth in 2024?
by Andreas Exarheas
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Evolving strategies in the U.S. shale sector mean output is not growing as quickly as in previous years.
That’s what Rystad Energy’s Head of Upstream Research, Espen Erlingsen, said in a release sent to Rigzone last month, adding that “investments in the shale patch are not expected to grow in 2024, keeping activity and output relatively flat”.
So, will U.S. oil and gas jobs be affected by a drop in shale growth this year? Rigzone posed the question to Dave Mount, the President of Louisiana based OneSource Professional Search, and Christopher Melillo, the founder and managing partner of the Dallas, Texas, based Kaye/Bassman Energy Practice.
“We’re not sure if in aggregate that oil and gas jobs, at least at the engineering/geoscience-professional level, will be affected by drop in shale growth this year,” Mount told Rigzone.
“We do think jobs will be affected in the third and fourth quarters of 2024 as the impact of many of the large mergers are completed and start affecting headcounts within the newly combined companies,” he added.
Potential layoffs from duplicate staff functions will result in layoffs and/or the associated severance packages, Mount told Rigzone. He added, however, that these take time to unwind, “so the timing of these will be affected by the closing dates of the mergers and subsequent company people assimilation and likely reorganizations”.
“Ironically, we feel like the U.S. economy – sometimes bad news is good news in that the candidate market has been very hot/tight and having more people either forced to look for new opportunities or those uncertain about their careers in a newly combined company may start to feel less loyal to their organization and be more open to job changes, especially those in the acquired side of a merger,” Mount said.
“If commodity prices remain neutral, we forecast a much more active period in job changing from company to company, but not necessarily increasing the total number of job openings. We will likely see more open jobs become filled more quickly due to a less constricted candidate availability/market,” he added.
Responding to the question, Melillo highlighted to Rigzone that, in 2023, U.S. oil/liquids production exceeded forecasts and said there are many experts who will claim that forecasts have been, and are currently, too conservative.
“As of last year, U.S. shale/liquids production comprised 48 percent of global growth from non-OPEC operators,” Melillo told Rigzone.
“While that cartel has attempted to affect pricing due to supply reductions and such, the U.S. has been able to increase production with a continued improvement of efficiency and productivity gains, specifically in the Permian basin,” he added.
“However, with many European oil and gas firms being forced into divestment and several super mergers among the majors in the U.S., there will be redundancy that cannot be overcome without new drilling sites being allowed,” Melillo warned.
The Kaye/Bassman Energy Practice founder outlined that, even though shale output will continue to increase in the short and midterm, “these redundancies and improved efficiencies mean there will be a continual but slow decline in existing jobs for the upstream operators”.
“This also means that without new permits and leases, there will be no new jobs added in the traditional sense of professional engineering and geoscience,” Melillo said.
“The fortunate side is that there will still be some slight growth in the peripheral jobs for field engineering, HSE, and other related service jobs associated with upstream production as we continue to improve infrastructure which has been a direct contributor to the stated efficiency improvements,” he added.
Melillo told Rigzone that many of the larger firms are looking to acquire existing assets and reduce debt and highlighted that “none of this comes along with any development of new assets”. Melillo also pointed out that total drill rig counts in the U.S. are down to 619 from 759 a year ago.
“These numbers paralyze the professional engineering and geoscience job outlook and other than attrition, you cannot expect to see any ‘newly created’ openings, and in many cases, you can expect to see a lot of those vacated positions due to retirement or career change to not be backfilled as once again, redundancy and efficiencies do not require the headcount,” Melillo warned.
by Andreas Exarheas
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas