Experienced oil field workers in dwindling supply as demand grows

By MARK BABINECK The Associated Press 03/21/00 1:17 PM Eastern

NEEDVILLE, Texas (AP) -- James Vrana has been sinking steel into Texas soil his entire adult life, sweating over countless wells seeking oil and natural gas more than a mile below.

Vrana works for San Antonio-based South Texas Drilling Co. as a toolpusher, meaning he's in charge of every aspect of keeping an oil rig running.

These days Vrana, 40, finds himself among a dying breed. Thousands of colleagues abandoned the oil patch when crude prices bottomed out in December 1998.

"A bunch of my friends, when it (oil prices) got low, they just found something else," Vrana, 40, said over the din of Rig No. 11, which is feeding 8,000 feet of pipe into the clay outside of Needville, 25 miles southwest of Houston.

Now that prices have nearly tripled, and operators try to seize upon $30-a-barrel oil to mend their balance sheets, industry insiders fear any move to boost drilling may be stilted by the exodus of pros like Vrana.

"It's already happening," said Morris Burns, executive vice president of the Permian Basin Petroleum Association, an industry association in oil-rich West Texas and Eastern New Mexico. "We've got rigs stacked (mothballed) that won't get unstacked because there are not enough hands to run them.

"What happens is, someone calls up and says, `Hey, I need a rig.' They (drillers) say, `Take a number.' Just like Baskin-Robbins."

It's been nearly a full year since the Organization of the Petroleum Exporting Countries cut production by 4.3 million barrels a day to gradually increase the per-barrel price from around $10 -- below break-even for just about any U.S. well -- to above $30.

Producers, wary of the market's unceasing volatility, have used this time of expensive oil to concentrate on reducing debt and restoring cash reserves. Still, Houston-based Baker Hughes Inc.'s most recent count of U.S. land-based rigs showed 626 in action, better than 50 percent above the historic lows set last spring.

"We're looking at the lull before the storm if prices continue to stay up," said Jim Henry, president of Henry Petroleum in the West Texas city of Midland, hub of the continental United States' most active onshore oil patch.

"You're going to see the rig count back up nationally to 800 or something like that. Probably not 1,000, but considerably over what it is right now. But, we're already operating at capacity in experienced workers."

The U.S. oil and gas industry has lost 26 percent of its payroll over the past decade, according to the federal Bureau of Labor Statistics. The steepest one-year drop was in 1999, when the number of workers fell 14 percent to 293,100 from 339,200 in 1998.

The downward trend continued in the first two months of this year, falling 6 percent in January and 3 percent in February, from the year-ago months, respectively.

Roughnecks, the workers responsible for feeding pipe into an oil well to set up a rig, make about $20,000 a year to start, if there's enough work to last the year.

Vrana admits he's constantly teaching new hands, but is not alarmed.

"It's no big deal to train them," Vrana said. "The main thing is having (an experienced) driller and derrick hand," equivalent to a captain and a first mate.

The drain on qualified personnel hasn't been limited to the field. Layoffs and cutbacks in an otherwise vigorous economy have driven knowledgeable oil workers at all levels to myriad competing industries, said Mark Kobelan, president of Marquee Corp. in Houston.

"I think people are getting opportunities to get a job elsewhere: geologists, engineers, landmen," Kobelan said. "If they found something good, they're not coming back. Why should they? Why come back to an industry where there can be one good year and three bad."

With the skilled work force having hemorrhaged so much since the first major bust in the mid-1980s, the Texas Engineering Extension Service believes it might have a partial answer to the talent drain in two rig training facilities.

Bob Prock, an assistant director with the Texas A&M University-affiliated agency, says the shuttered rig training school in Abilene is capable of teaching the finer points of roughnecking to anyone willing to learn.

After years of dormancy, the school reopened in 1998 with a Workforce Commission grant, only to quickly close again when oil prices began tumbling.

"We only taught a couple of classes before (prices) turned south," Prock said. "The Workforce Commission is trying to decide whether to turn us loose again."

Prock also has high hopes for industry involvement in adding skill courses to the agency's offshore training school in Galveston, which currently concentrates on safety courses.

"We could simply expand the program to train roustabouts and other members of crews," Prock said. Roustabouts are entry-level rig workers considered jacks of all trade.

For his part, Vrana appreciates the need for rig experience, but says he'd rather train green workers himself.

"The old-fashioned way still works pretty good," he said

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-- Martin Thompson (mthom1927@aol.com), March 21, 2000

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