In a patch of a cornfield in South Texas, floodlit lights illuminated the rig as it drilled deep into the Sisti A3 well. About a mile below the surface, the ConocoPhillips machine was striking liquid gold.
Sand-like material known as ceramic proppant was being mixed with water and pumped into the Sisti A3 at high pressure. This forces open cracks in the Texas rocks where oil and gas is trapped within.
This type of hydraulic fracturing – dubbed “fracking” – has increased the output of each of well the company drills by 30%. In two years, ConocoPhillips has doubled its volume of ceramic proppant.
The world's largest independent exploration company, Conoco is one of a cluster tapping into the Eagle Ford region. The US shale formation is known as the oil and gas industry's equivalent of Silicon Valley.
Fracking has raised US crude oil output by more than 65% in the past six years. This shale gas revolution is helping to ignite an employment boom across the entire energy industry.
The sector’s hiring machine has never been more resilient. A drop in oil prices – down some 20% since June – has ratcheted up pressure on oil and gas companies, which are leaking cash.
They face not only geopolitics but weaker economic growth in Europe and Asia – driving down prices. If the trend is not reversed, jobs would usually be slashed. But the market faces a dearth of senior managers.
“There undeniably is a skills shortage in oil and gas,” says Jane Christopherson. As a managing partner at the Curzon Partnership, a London-based executive search firm, she fills senior slots for clients that are some of the world's biggest energy majors.
Despite unstable markets, these firms cannot find enough new hires to satisfy demand. “Many of the companies would say they never reached the headcount they wanted in previous years," says Jane.
This talent shortage is frequently cited as a one of the greatest challenges facing the oil industry. Geopolitical tensions are out of their control.
The old guard of engineers and managers who were hired before the 1980s are beginning to retire, recruitment consultants say. A 2012 survey by Schlumberger Business Consulting said that by 2016, the shortage of experienced oil professionals will reach 20% of the total talent pool.
Part of the problem is the energy industry’s cyclical nature. Jane says that at certain points, oil prices were so low that graduates flocked to other sectors due to a lack of energy company recruitment.
“There isn’t the workforce of that age range. They are the ones that all the companies want to get hold of,” she says.
She thinks that MBA graduates are well placed to capitalize on this demand. “MBA [programs] are by no means an easy pursuit. Rounding yourself out like that certainly adds to your attraction, and companies are keen to get their hands on those folks,” Jane says.
“If someone has gone out their way to make themselves that bit more rounded – its music to their ears.”
A recent survey by Hays, the recruitment consultant, found that these shortages were the main concern for the industry, worldwide.
The survey of 72,000 oil and gas employers found that over 70% of companies plan to expand their workforce in 2014. Experienced managers such as MBAs, who need several years’ work experience to enrol at business school, are seemingly in great demand.
“We would expect the war for experienced talent to remain fierce, and skills shortages to remain the most pressing concern facing the industry,” say John Faraguna and Duncan Freer, managing directors at Hays Oil and Gas, in the report.
This is damaging the sector. Schlumberger Business Consulting says that 73% of international oil companies which responded to its survey said staffing difficulties could trigger project delays, while 59% said it could lead to more risk-taking.
But MBAs can look forward to rich rewards. These skills shortages have fuelled a wage surge. Average pay in the UK’s oil and gas sector was set to rise by 15% in 2013, according to industry recruiters Oilandgaspeople.com.
Hays’ survey found that imported hires averaged $100,600 in salary last year. But in the US, this rises to nearly $120,000. America’s shale boom is responsible for much of that increase.
Shale gas has created a well of employment for business school graduates, according to careers directors. “I have seen increased hiring related to the energy industry through consulting, investment banking and private equity roles related to the energy industry, versus direct interest from oil and gas firms,” says Jonathan Masland, director of the Career Development Office at Dartmouth: Tuck.
He says more applicants are coming to the New Hampshire-based school with energy backgrounds, as they look to shift into business roles.
Demand in Europe – particularly for roles in the North Sea – remains stable but Jonathan says there are far greater job opportunities for MBAs in the US’s energy industry.
Jane recruits senior managers for energy businesses based in oil-rich emerging markets – but the shale boom has had a huge effect on the US jobs market.
She says big firms, smaller operators and service providers are hiring more strongly than in the UK. “It’s become this substantial business that has a momentum all of its own.”
But she adds that demand remains stable enough that the right candidates can simply pick which region they want to work in.
Companies such as General Electric are beginning to see the benefits of assembling a division providing products and services for oil and gas companies.
It has about 45,000 employees in this sector worldwide. Services orders for its oil and gas business were up 23% in the second quarter of 2014.
Ferdinando Beccalli-Falco, GE European CEO, says: “The core of [the] oil and gas industry is still in Europe, despite the fact most exploration doesn’t happen in Europe. Oil and gas is particularly concentrated for us in Europe.”
Business schools in Canada are starting to take advantage of a positive energy outlook. Western Canada’s oil production is expected to rise 7% this year, according to the National Energy Board, the regulator.
The Sauder School of Business Natural Resources Club has collaborated with Goldcorp, a global gold mining company based locally in Vancouver.
Brett Hannigan, club president, says many of the school's MBAs aspire to work in the resource sector. “Canada is a resource-based economy and Vancouver is a hub for mining and forestry – and has a fast-developing liquefied natural gas industry,” Brett says.
But a recent MBA employer survey by QS found that the energy industry’s hiring spree is being driven by smaller companies operating in renewable fields. It predicts that globally, the energy sector will hire 18% more MBA graduates in 2014.
Jonathon says Tuck’s MBAs are being hired by firms focused on energy efficiency like Enernoc and Opower, in addition to renewable fuel sources such as Bloom Energy, Ogin and FirstSolar.
During the first quarter of this year, solar generated 74% of new electric power in the US, according to the Solar Energy Industries Association, a trade group, and the sector employs 145,000 people.
“Most of the opportunities focused on sustainability are with smaller entrepreneurial organizations – for both summer internships and full-time roles,” he says.
Filippo Comelli spent four years working for European Energy A/S, a renewables firm in the wind and solar sub-sectors. He finished an MBA program at EMLYON Business School in France this summer, and now works for a separate sustainable energy major in Cape Town, South Africa.
“[The company] wants to become the leader of renewable energy production,” says Filippo. “What else would you wish to do post-MBA, if not enter an exciting and changing industry, and a company that is eager to grow?”