Thread regarding Halliburton Co. layoffs

Hard to find workers now

We knew this was coming, didn't we (source below):

MIDLAND — Three years ago, when crude prices still floated above $100 a barrel and the nation's oilfields were booming, Clint Concord could hire 20 new workers a day in the West Texas oil patch to meet the constant demand from his production company clients.

Today, with the Permian Basin booming, Concord said he's lucky to find one qualified candidate every two days to keep up with the work. Concord, a senior operation sales manager at Byrd Oilfield Service, estimates his company is losing $7,000 a day because it still doesn't have enough truck drivers to deliver equipment to its crews.

"Some people got smart and got out of the oilfield," Concord said. "They're finding other career paths because they can't handle the inconsistency of it."

The oil bust that wiped out scores of companies and tens of thousands of jobs is still weighing on the industry more than 18 months after prices hit bottom in early 2016, its brutal memories contributing to a labor shortage that is slowing the energy recovery. From small companies like Byrd to global giants like Houston's Halliburton, the oilfield services companies that drill, frack and haul equipment, supplies and wastewater are finding far fewer people willing to work for a boom-and-bust industry.

Slowing a rebound

The shortages are frustrating oil producers and disappointing investors and analysts who had expected the surge in drilling activity that has followed rising oil prices to yield more crude and more profits. Oil executives, meanwhile, have deeper fears that the difficulty hiring is a harbinger of long-term consequences that could hobble the industry for years — or decades — to come.

The precedent is the epic 1980s oil bust, which drove a generation away from the oil industry, leaving a workforce gap that companies are struggling to fill. In recent years, companies have grappled with the challenge of replacing retiring workers in their 60s with a new generation largely under 35, without midcareer employees to aid the transition.

Even in the prolific West Texas oil patch, it's as if thousands of workers have disappeared — an eerie echo of 30 years ago. Bandy Watkins, a salesman at energy service company Pinnergy in Midland, has posted ads on social media, put up flyers in truck stops and paid for ads on radio stations and local newspapers in the search for truck drivers. But he hasn't found nearly enough to hire.

"I don't know where they went," Watkins said. "Finding fracking truck drivers is now extremely hard."

Halliburton has hired hundreds of workers in West Texas this year to meet demand for hydraulic fracturing services, but even the largest U.S. fracking company has had to look beyond Texas to replenish a workforce that was decimated by years of cheap oil prices. The company holds job fairs in places like Alabama, Mississippi and Nevada.

"We have a real bottleneck with people out here," said Chris Gatjanis, who runs Halliburton's operations in the Permian. "When the market fell, we reduced our head count. All of us did. Some of those people didn't come back to the industry. They were burned and hurt. It takes a while to build that back up."

Busts and booms

Halliburton and its oilfield services rivals Schlumberger and Baker Hughes cut more than 100,000 jobs worldwide between them as oil prices fell in 2015 and early 2016. Since the middle of last year, as crude prices and drilling activity recovered, oil producers and service companies have hired around 30,000 workers in Texas, after cutting more than 100,000 oilfield jobs across the state — roughly 1 in every 3 such jobs — between December 2014 and July 2016.

Drilling has surged in the Permian Basin this year, but the shortage of workers for 50-person fracking crews has led oil companies to leave hundreds of wells untapped for months in West Texas. The number of dormant wells in the Permian Basin has climbed from 1,310 in June 2016 to more than 2,400 last month.

Analysts blame a lack of available labor and fracking equipment in West Texas, where the bulk of the oil industry's nascent recovery has occurred this year. The unemployment rates of Midland and Odessa, two Texas cities at the heart of the Permian Basin, have fallen from 4.9 percent and 6.8 percent, respectively, in June 2016, to 3.2 percent and 4.3 percent in August, according to the Labor Department.

"The labor pool has been completely plundered," said Bill Herbert, an analyst at Simmons & Company International in Houston. "Growth expectations are being recalibrated."

Luring the workers

The oil industry's ongoing recovery began in an economy with a low unemployment rate and far less spare labor than after the financial crisis in 2009, when the nation's first shale oil boom began. To lure workers from out of state, Halliburton and its rivals are raising wages, offering housing allowances and providing temporary homes, known as man camps.

All of this, however, is increasing labor costs that will soon eat into companies' bottom lines, ultimately slowing investment and further weighing on the recovery, analysts said. So far, prices for various oilfield services have risen between 15 percent and 25 percent in the Permian Basin, but those prices will have to continue to increase to get workers back into the oil patch.

CUDD Energy Services, a hydraulic fracturing firm in Midland, took several months to fully staff its fracking crews after idling about half of the pressure pumping equipment used in hydraulic fracturing during the oil downturn.

"Right now, we've got more demand for frack crews than there are frack crews," said Clint Walker, general manager at CUDD. "Everybody's trying to hire as fast as they can to meet demand. But the manpower isn't there yet."

In December 2014, at the peak of the oil boom, the average wage for an oil industry worker in Texas was $1,276 a week, according to the Texas Workforce Commission. That dropped to a low of $1,047 a week in March 2016, the month after crude prices reached a 12-year low at $26 a barrel. Last month, with prices around $50 a barrel, those wages had rebounded to $1,206 a week.

"Labor is an issue," said Claire Harvey, a principal on the energy investments team at private equity firm Pine Brook Partners in Houston. "And prices are going up."

Another shortage in the oil patch: working fracking equipment. During the downturn, scores of oilfield services companies cannibalized their idled equipment for spare parts, instead of repairing the equipment that was working in the oilfields. Across the United States, there's enough demand for fracking equipment totaling 14 million to 18 million hydraulic horsepower. But there's only 12 million hydraulic horsepower available today.

Equipment shortages

Just about every kind of oilfield tool is in high demand, and there's a limited supply in the Permian Basin, said Paul Madero, who oversees Permian Basin operations at Houston oilfield services company Baker Hughes, which is now controlled by General Electric Co. of Boston. Thomas Rinald, president of Aim Direction Services, a drilling services company in Odessa, said for months his company couldn't find enough of a certain motor used to power drilling in working condition.

"The entire supply chain has been challenged," Madero said.

Across the oil patch, trucking companies said it has become much harder to find enough commercially licensed truck drivers in West Texas to keep up with rising demand for hauling sand and oilfield equipment. In short supply, some of these truckers, particularly those with years of experience, can make as much as $4,000 a week — $200,000 a year.

Next month, the shortage of drivers could worsen. The Department of Transportation will begin requiring truckers to use electronic logs to keep track of the time they spend on the road and idled — a rule that will make it harder for truckers to work beyond certain driving time limits. Many veteran drivers, who would likely earn less under the new rules, are expected to retire.

"You'll have fewer trucks, as far as hours go, and higher demand," said Chris Welcher, safety director at Horizon Transportation, a frack sand trucking company in Midland. "We'll need more truckers, and at some point it'll have to affect the oil companies. Companies are going to say: 'There's a shortage. I'm going up in price.'"

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10 replies (most recent on top)

Halliburton gave me such a welcoming send off that i'd think twice before coming back.

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When I was laid off and our business was scrapped, the superintendent said, "Get youself, your stuff and get the hell out and don't ever come back. " Almost 40 years service, head over 3 dept. and no problems. Now it's all college kids that come and go and know nothing and don't care.

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Just wait till you settle down to Midland (middle of nowhere), that's when you'll be laid off.57

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The bar for working offshore with HAL is just to walk and talk. How can it be lowered.

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HAL will definitely find the workers, they just have to expand the pool of applicants. To you and me that means lowering the bar for the quality of people we hire. The positions will eventually get filled with inexperienced, less qualified people and the result will be a decrease in service quality to the clients.

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Industry is away to turn up only meaning company's shall invest in personnel operational equipment etc

This is good for the offshore working man as this will increase pay as many people shall not return and of course halliburton shall find it hard to get people as most of the managers are for them sleds ie lining there own pockets.

Oh finally lack of investment and poor payers

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maybe dey could make a big investment in themselves,,,,,,,, like they did in Baker

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i don’t feel one bit sorry for these greedy basxxxds, didn’t stop them from lining their pockets did it, setting up their position and title to a confirmed active date, Let them rot. let them struggle to find a human resource to take advantage of. Let them go to viginia, kentucky or wherever to hire an out of work coal miner. Take them all to west texa, texas plains and there’s lot o work for wind techs.

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The corporate shill who spoke for Halliburton, PROVES that he is a douche by using the approved terminology "reduced head count", instead of telling the TRUTH about how they unceremoniously sacked their most experienced employees.

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Equipment shortages, I can possibly understand. The supply and demand will correct that in time.

D o T will continue to enforce and impliment new rules and laws, that's what they do....

But these damn service companys, halliburton and schlumberger....well, they layed off all the experienced hands. And in the process tried to hire snow flakes that can't find their a-- to wipe.

They sure built up the office workers with a bunch of idiots.

Maybe, if they get their heads out of their liberal a--, that will trim down that tower of overhead libtards so they can hire qualified experienced employees that know what the hell is going on.

How the hell do they think that they got those plush little corporate buildings.

If we can't get it done out here in the field, they don't have all that crap.


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