The ambiance for oil has brightened considerably, with president-elect Donald Trump stacking his cabinet with oil-friendly figures and handshake deals overseas for OPEC, Russia and others to cut production.
That, in turn, seems to be adding an edge to an oil and gas industry that was already slowly floating out of its doldrums, in an inch by inch recovery that has so far mirrored an equally slow rise in oil prices.
Meanwhile, the labor crunch in North Dakota continues, and looks to get more intense by mid-2017. Cindy Sanford, office manager for the Job Service North Dakota office in Williston, is on the front lines of oil and gas job recruitment in the area.
“Oilfield jobs are definitely on the rise,” she said. “We had Oil States here on Monday and Schlumberger for the first time here on Thursday.”
She’s seeing the largest upward tick for jobs in hydraulic fracturing crews, which average between 45 and 65 people per crew. Class A CDL driving jobs were already high, and continue to be so.
“We are seeing sign-on bonuses for Class A CDL drivers and some per diem coming back on housing,” she said.
Job Services North Dakota’s Spring Multi-Industry Job Fair has just opened for registration, and it already has 11 companies signed up for a booth, Sanford added.
The one-day event is s from 3 to 7 p.m. March 22 at the Grand Williston Hotel. Early bird registration is $100, a $50 savings on the usual booth fee. Sanford can be reached at 701-774-7900 for details on the upcoming event. The Fall job fair sold out all its company booths, and had a waiting list. The spring job fair seems poised to do the same.
North Dakota’s labor crunch did not cease during the downturn. The state’s core oil-producing counties, which include Williams, McKenzie, Divide and Mountrail counties, list a little more than 1,300 job openings across all sectors online, with about 900 active resumes, according to Job Services North Dakota statistics.
Meanwhile, the mining, quarrying and oil and gas extraction sector were about 13 percent of North Dakota employment in the first quarter of 2016, which compares to a little more than 17 percent in the first quarter of last year. Williams County listed 287 direct oil and gas industries, with employment of 11,034 people, and 895 related oil and gas industries, with employment of 8,446 people, for 2015, the most recent figures available.
Industry specialists have predicted that the world oil supply glut will be largely gone by mid-2017, and most are predicting further increases to oil activity at that time. If the models hold, job figures are set to take off again, and intensify the already existing labor crunch.
Sanford has said throughout the downturn that the area continues to need many qualified professionals to fill existing positions, and that there has been no job bust in the state.
Exploration and production companies active in the Bakken have collectively outlined plans to bring online 10 additional rigs by year-end in third-quarter earnings calls, which Department of Mineral Resources Director Lynn Helms noted in his most recent production report would bring the state’s total rig count to 50.
It’s difficult to tell whether overseas deals to cut production or recent Trump administration moves are having any direct effect on hiring plans in the industry — but it is boosting optimism for many of the oil and gas producing companies.
“I think there is a tremendous amount of guarded optimism,” Alan Olson, executive director of the Montana Petroleum Association, said. “And it is a chance, there again, to make hay while the sun shines and take advantage of where prices are going and see what we can do. But at the same time, be prepared, in case there is a turnaround. But I’m hearing a lot of optimism, and that makes me feel good.”
Joe Erickson is CEO of E & M Services, a roustabout company headquartered in Watford City with offices in Arnegard, Sidney and Williston. He said his company has already been busy the past couple months, and is among those actively seeking experienced help right now. Due to the present hiring crunch, they recently put together programs to pair inexperienced workers with mentors in the oil field to train up any new hires that have less experience.
They are now employing about 165, which he said is about what they were at peak, and they are still short a few positions.
“We have been hiring well over a couple months now,” Erickson said. “So we have definitely seen an influx of work coming our way.”
Optimism generated by headlines isn’t having any concrete effect on hiring plans that he knows of right now.
“It’s been a great move for our entire industry nationwide, worldwide,” he said. “It’s definitely got people more eager to know that there is going to be more support in our industry now, as opposed to such a downplay against it. We’re a service company, though, so our influx of hiring comes from added workload with other operators in the area. We can’t hire people to stand around and hope we get more work.”
Still, the recent change in the political atmosphere and moves overseas to lower the supply glut have helped burnish his optimism.
“It’s going to be a good, solid year,” he said. “We hope to continue to capitalize on the Bakken area here, and we are looking to expand into other regions in 2017. We believe we see some opportunities in Texas and Oklahoma.”
By Texas, he means the Permian Basin, which has been a rising star lately, pulling some investments out of the Bakken, according to recent earnings calls. SM Energy is among exploration companies to recently announce selling Bakken holdings to obtain position in the Permian, but there have been several others as well.
A recently completed U.S. Geological Survey study estimates that the Wolfcamp Basin in the Permian contains 20 billion barrels of oil, as well as various other associated liquids like natural gas. This estimate is three times the 2013 estimate U.S. Geological Survey prepared on the Bakken and Three Forks, putting North Dakota’s shale play as the No. 2 largest in the nation, behind the Permian.