When Daniel Forero left home in California to pursue a petroleum engineering degree at Texas A&M University, he thought his career prospects were strong.
As the energy sector flourished, many around him pointed to a petroleum engineering degree as a surefire ticket to success in the age of the American oil boom.
But as oil prices continue to plummet – they reached five-year lows last week – Forero, now a senior, is quickly getting a harsh lesson in the cyclical nature of the energy business.
“What I kept hearing was ‘there’s plenty of jobs in this industry,’ ” Forero said. “Now that I’ve gotten to this point, it doesn’t seem that way.”
Well, two years ago Texas A&M was warning petroleum engineering students about the “sustainability of the entry level job market” given the explosive growth in the numbers of students in that field. The price of oil was not guaranteed to keep rising forever, and smart people could have predicted this turn of events.
“They talk about oil prices going down, enrollment going up, and say ‘you’re in engineering – you do the math,’ ”
Halliburton CEO Dave Lesar hinted at job cuts in an email telling employees that “2015 is going to be a tough year.” A week earlier, the company — which counts on oil producers as customers for its oil-field services — announced 1,000 layoffs in the Eastern Hemisphere.
BP, the London-based international integrated oil company, already has said it will cut an unspecified number of midlevel supervisors in its oil production and refining businesses, as well as some back-office jobs.
Meanwhile, big independent producers including Marathon, ConocoPhillips and Apache say they’ll cut their 2015 capital budgets. While those budgets don’t include salaries, the figures are a sign of a more conservative approach.
Engineers and others with strong experience are less at risk for losing jobs, but new college graduates may find it tough to snare high-paying jobs. Anxious students will be looking closely at hiring patterns over the next six to ten months.
… as oil prices fall and enrollment rises, some students are considering pursuing master’s degrees to avoid entering the workforce when companies are scaling back. Others are looking into sales or surveying positions – jobs that would get them into the industry but wouldn’t necessarily take advantage of their engineering degrees.
The boom and bust nature of the oil business is very familiar to me. I was working as an exploration geologist during the oil bust of the 1980s, and left the industry to make a career change that turned out well. Many others did too. Even though current conditions provoke anxiety among students aspiring to lucrative oil industry jobs, chances are they have skills that will transfer to other fields. Although it’s disappointing now, it’s helpful to take the long view.