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Trends In the Oil and Gas Industry

Trying to outguess the ups and downs of the oil and gas industry is like outguessing a roulette wheel in Vegas. People make and lose fortunes guessing whether oil and gas prices will go up or down.

If speculators invest, oil companies have lots of money for exploration and drilling. If investors get skittish, the industry has to tighten its resources. That means halting new drilling or even downsizing. Whether these speculators buy or sell will make the difference as to how well the industry does, and what the employment picture will be like.

Boom and Bust

You'd think that since everyone needs gas and oil -- for fueling cars, heating homes and powering public utilities -- the industry would be pretty stable. Think again.

"You're dealing with a commodity," says Wayne Wetmore, senior vice-president of operations for a petroleum industry training center. "It's classic supply and demand. If prices are high, everyone drills wells. By the time new product is on the market, the price goes down. It's been going on forever."

Many factors raise and lower prices: how much OPEC (the Organization of the Petroleum Exporting Companies) is producing, how warm the weather is and how much oil is available at any given time. Given all these factors, it's impossible to predict what will happen in the industry.

"The oil and gas industry is cyclical," says Neni Manalo, manager of planning and resources for an association of petroleum producers.

"If there's a boom, then there will be a bust. When you talk with human resource planners in oil companies, they can never really plan. If you could plan, I'd be rich right now."

Even gauging where the industry is right now is tough. Much depends on whom you speak to, and what part of the industry they're in.

Employment Predictions

To understand where the industry is now, it helps to look back a few years. The 1980s and 1990s were a rough period for oil and gas in the U.S. Many people were hurt by the bust.

"A lot of people in the U.S. lost their jobs during the last two decades," says Mike Ayling, an industry recruiter in Tulsa, Oklahoma.

As a result, students weren't interested in preparing for jobs in the industry. The terrorist attacks on September 11, 2001, combined with recent events in the Middle East, also had an impact.

University programs used to rely on foreign students for enrollment. Now, it is increasingly difficult for these students to enter the country. A shortage of students caused many universities and colleges to drop their training programs.

Plus, Ayling says investors are reluctant to put money into oil projects in the Middle East right now. The political climate is too uncertain. Therefore, there may be fewer jobs available in international destinations.

Monica Danforth works for an industry recruiting firm in Texas. She says she has seen an increased demand for petroleum and drilling engineers.

Looking to the Future

Ayling believes the oil industry will have a serious labor shortage over the next 10 years. Most employees are nearing retirement age. When they retire, many jobs for trained workers will open up.

But getting trained could be a challenge. Ayling hopes the oil companies will start offering training to new recruits and that the universities will reinstate some of the programs that have been dropped.

"And there is always a demand for laborers to work on the rigs," he says. "Oil companies are having difficulties filling those positions."

Stephen Ewart is the manager of communications for a petroleum association. He says there is a huge demand in rural areas for people with all skill levels. Trades people, heavy equipment operators and power engineers are in particular demand.

"We need people to fill the full range of corporate services -- accountants, lawyers, geologists, engineers and others," he says.

The industry also needs computer technicians, software developers and other technologically trained people. "It's a technology-driven industry," he explains. "For example, we do GPS positioning on wells and we do three- and four-dimensional sub-surface imaging."

There are so many factors involved that it's tough to see into the future.

"There's a cyclical effect and it's hard to predict how long they'll last and how high or low the dips might be," says Wetmore. "From a career planning perspective, you might get out of school during a boom period, or you might not."

A Safe New Career?

Salaries are good. "The salaries are very attractive," Ayling says. "People just out of college are starting in the $65,000 range. Experienced people make $120,000 to $150,000. Managers and senior technical people are making more."

Despite the good wages, there is a downside. People on rigs work in remote areas, and in extreme weather conditions. The work tends to be cyclical and project driven. When one project ends, the worker is looking for another position.

On the other hand, it's an exciting field.

"Don't go into this because the money is good," advises Ayling. "Go into it because you are excited by the prospect of finding oil and gas."


Oil and Gas Online
A huge directory of sites relating to the oil and gas industry

American Petroleum Institute
Represents the U.S. oil and natural gas industry

Oil and Gas Journal
Get the industry news

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OCAP believes that financial literacy and understanding the financial aid process are critical aspects of college planning and student success. OCAP staff who work with students, parents, educators and community partners in the areas of personal finance education, state and federal financial aid, and student loan management do not provide financial, investment, legal, and/or tax advice. This website and all information provided is for general educational purposes only, and is not intended to be construed as financial, investment, legal, and/or tax advice.