Employment prospects gushing for petroleum engineers

Students are being courted - and offered good starting pay - by firms in the booming oil industry.

College students Emily Reasor (left) and Julie Arsenault attend a recruitment program offered by Royal Dutch Shell's U.S. arm.

HOUSTON - So much for sweating out that first job after college.

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

Bustling oil-field activity and retiring baby boomers, among other factors, have petroleum outfits trying to hire thousands of engineers. Experts say the trend is expected to extend into the next decade as worldwide energy demand grows.

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

The Oliver Wyman Group, a management-consulting firm, says roughly 8 in 10 global oil and gas companies have forecast a shortage of petroleum engineers through at least 2011. The American Petroleum Institute said U.S. energy companies would need at least an additional 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 Co., 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 United States and Canada.

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

David Pursell, an analyst with Tudor Pickering & Co. Securities Inc., said it was difficult to quantify how much of a hardship the shortage would be. But he said staffing shortages were certainly a factor when a company considered buying an existing project or starting a new one.

"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."

Despite efforts to find and market alternatives, fossil fuels will continue to be the world's primary energy source for now, making petroleum and other engineers vital for finding and extracting oil and natural gas around the world.

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

The petroleum institute 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 U.S. oil-field employment peaked at 860,000-plus in 1982, companies slashed more than 500,000 jobs over the next 18 years as per-barrel oil prices plummeted to the low teens, compared with about $70 today.

An institute report said those layoffs "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 salaries of $70,000 a year or higher.

The number of undergraduates studying petroleum engineering at Texas A&M University jumped from 191 in 2001 to 507 last fall. A&M's petroleum engineering school, one of the nation's largest, had 1,422 undergraduates in 1982.

Companies are using various methods to grab new talent.

Shell began its recruitment program, called the Gourami Business Challenge, in Europe more than 10 years ago before exporting it to the United States in 2005.

The challenge for Reasor, Arsenault and the others, who represented 36 colleges, was to create and present a five-year business plan for Shell's operations on the fictitious Indian Ocean island of Gourami.

Shell representatives said Gourami was more an audition than a competition.

"The students are pushed," said Lorie Hernandez, Shell's graduate recruitment and university relations consultant. "Our intent is to look for reasons to hire people."