Weathering the Downturn—Stay in School or Return to School?

The oil and gas industry has a major role to play in the ever-changing energy landscape by combining expertise, people, and technology in shaping its future. Many current and prospective petroleum engineers are facing the difficult decision of pursuing a career in the industry, mainly due to the dearth of opportunities in the current market scenario and the increasingly negative perception of the industry amid rising environmental concerns.

Although the opportunities to pursue a career in petroleum engineering may seem bleak, the industry has always been cyclical in nature. It is therefore in the best interests of those who wish to rejoin, remain in, or enter the industry to position themselves to take advantage of the opportunities that will eventually arrive.

In down markets, many young professionals and potential graduates find themselves with fewer industry opportunities to pursue—and those are being chased by hundreds if not thousands of individuals, many of whom possess decades more experience.

What should they do to best secure their future in the oil and gas industry? This article seeks to address this question by reviewing the current trend, exploring the pros and cons of staying in school or returning to school, and providing the authors’ perspective on the best path forward for young professionals.

The Current Trend

Amidst the coronavirus pandemic, this year has proven to be eventful and challenging for all. This is especially true for the energy industry, which also a dealt a blow with the oil price volatility earlier this year, where it is nearly impossible to find someone who has not been affected or knows someone who has. Graduates have seen job offers rescinded or delayed indefinitely. And, according to Bloomberg, many graduating students are making alternative plans, preferring a stable career over exposure to the boom-and-bust cycle of the oil industry. However, despite the current state of flux, with careful planning, young professionals can seek to explore new opportunities during this transitional period.

After all, a smoother sea never made a skilled sailor.

To help recent graduates who have had a change in plans, universities such as Penn State have offered summer research opportunities to students whose job offers have been revoked. This is a timely effort that will allow those with a concentration in petroleum engineering to put in practice the knowledge gained by closely working with oil and gas corporations-funded projects.

Staying in School: The Pros

Increased Skillset. Petroleum engineers are expected to exhibit significant skills, much of which is acquired only after students completely understand the fundamentals of their undergraduate studies. Staying in school would allow students to leverage current and emerging digital technologies to master the skills required in the current (and future) market. Additionally, faculty members of graduate programs now favor integrating data analytics into core courses in petroleum engineering curricula, providing students an opportunity to not only learn these fundamentals but to apply them in challenges facing the industry. By enhancing skillsets in demand by a range of industries, students can make broader career choices and create more room for advancement.

Broader Horizons. Carbon capture and storage (CCS) presents great opportunities for both young and experienced petroleum engineers who are looking for career alternatives without a sharp deviation from the fundamentals they are already familiar with. CCS is an amalgam of technologies that can greatly reduce CO₂ emissions from hydrocarbon-extraction operations. Similarly, geothermal engineering is also gaining traction around the world and provides petroleum engineers with opportunities in a parallel discipline. Universities such as Clausthal University of Technology (CUT) in Germany offer accredited MS programs in geothermal engineering, encapsulating subjects that synergize with existing petroleum engineering curricula (Table 1).

Unexpected Opportunities. Currently, employment opportunities are declining for individuals who have not furthered their education beyond an undergraduate degree. This can primarily be attributed to the increasing competition among graduates. When deciding to further their education, current students are still in learning mode; continuing education is less daunting for them than for young professionals with work and family responsibilities. It is also important to note that the decision to continue education has a long-term benefit beyond one’s first job and social contacts. Current students can grab this added opportunity to stand out among peers in bringing innovative, creative, and fresh perspectives to the table.

Table 1—Study Plan of the MS Degree in Geothermal Engineering at Clausthal University of Technology

Source.

Staying in School: The Cons

Lost Experience. There is an opportunity cost for time spent in school and not working in a professional environment on real-world projects. While staying in school helps with gaining additional skills, it does not directly translate into experience. Some of the jobs that are available in the current market are tailor-made for professionals who are ready to hit the ground running, and there is currently an abundance of these candidates. Young professionals should be able to alleviate this somewhat by seeking out relevant internships with prospective employers.

Lack of Motivation. Approaching graduation and excited to enter the professional world but faced with the prospect of additional years in the classroom, students are in danger of losing interest. This is especially true if the purpose of returning to school is just to close a resume gap. It is important to be genuinely interested in and even passionate about a field. Graduate studies are not for the faint-hearted; consequently, the motivation has to be strong—and genuine. Otherwise, young professionals might get caught in a never-ending search for the best career path.

Lack of Job Security. The current trends in the oil and gas industry likely do not appeal to petroleum engineering students. Most of them have noted the harsh steps taken by companies in laying off employees and rescinding offers when economics are unfavorable. The volatility of the market sows seeds of doubt regarding their professional future. Given the incessant fluctuation of crude-oil prices, students are starting to look for opportunities outside the oil and gas domain.

Returning to School: The Pros

Improve and Develop Skills. A return to the classroom provides young professionals with an opportunity to improve current skills and learn new ones. Perhaps professional experience has exposed a weak point in their knowledge base that they can shore up through deeper study. Or perhaps they have been exposed to another discipline during the course of their work and wish to formalize their knowledge of it. Either way, getting back to school is an opportunity to focus on improving one’s marketability, whether it be for a return to the industry or a move out of it. A post-graduate degree may also allow young professionals to command a wage premium when they graduate and re-enter the workforce.

Focus on Personal Interests. Many young professionals find something to pique their interest during the course of their professional duties. However, the demands of personal and professional lives do not always leave sufficient time to satisfactorily pursue these. Post-graduate degrees centered around self-directed learning and research provide the perfect opportunity and resources to pursue such interests.

Filling the Gap. Returning to school helps minimize a potential resume gap without resorting to jobs that a young professional may be overqualified for and find unrewarding. It also provides the opportunity to make new connections via fellow students, professors, professional societies, and most importantly, through internships. Keeping a strong resume and a social contact list are important whether re-entering a bleeding industry or breaking into a new one.

Returning to School: The Cons

Admissions. The first hurdle to continuing an education is gaining admission to a program. Usually, the application process is a carefully planned endeavor. Sudden job loss and a scramble to gain admission are not the best conditions for creating a high-quality application. Compiling necessary test scores, recommendations, and other documentation on short notice can be difficult in the best of times. Additionally, if the admissions cycle does not sync up with the timing of job loss, there may be an unwanted delay between leaving the workforce and entering the classroom. Finally, admission to a program is not guaranteed; economic downturns are accompanied by significant increases in college and graduate school applications, commensurately increasing the competitiveness of attractive programs.

Cost. Not only will tuition, fees, and living expenses likely run to tens of thousands of dollars over the course of the academic program, but there will be a real opportunity cost. Spending years (depending on the program) out of the workforce will most likely mean, for an engineer in oil and gas, hundreds of thousands of dollars in forgone income. This is less of a consideration if there are no jobs to be had at the moment, but if the industry turns around during the course of an academic program, there is a choice to be made: complete the program and command a wage premium or return to the workforce for an immediate income.

Relocation. Employment in the oil and gas industry can take young professionals off the beaten track to locations without a strong local engineering institution. For these young professionals, returning to school will also require relocation. Returning to the workforce afterward may require subsequent relocation. For those with deep roots or careers other than their own to consider, the decision to relocate may be cumbersome.

The Authors’ Perspective

The decision to stay in school for graduating students or return to school for young professionals out of work is not an easy one to make. However, despite the pros and cons highlighted above, the practicality boils down to the specific situation of those involved.

In some cases, staying in school has proven to be the best decision: Students have an opportunity to carry out research tailored to specific challenges identified in the industry subsector of their choice. With a quality thesis, students position themselves for relevance in that sector immediately upon completion of the program. With the world focusing on skills such as critical thinking, complex problem-solving, and creativity, this period in the classroom should position students to develop such skills.

On the other hand, for young professionals whose jobs have been impacted by the downturn, the natural course of action for most is to seek new employment, even if this means turning to other sectors. This is mostly driven by a need to replace their income to sustain their lifestyle and possibly their family. For individuals fortunate enough to have access to funding of some sort, whether savings, grants, or scholarships, returning to school will afford them the opportunity to acquire specialized knowledge in emerging fields and eventually stand out among peers. Even young professionals who are obligated to work might be able to continue their education part time, but they must be prepared to navigate the complexities of work, life, and school.

In both cases, it would be wise for these individuals to seek volunteer opportunities where this knowledge can be immediately applied to position themselves for future opportunities. While there is no one-size-fits-all response to this difficult situation, from a career standpoint, decisions should rest on the value generated and shared over the medium and longer terms—not just on immediate gains. There will always be sacrifices to be made as downturns demand that both individuals and companies remain agile in adapting to new circumstances. Indeed, the market dictates that only the fittest will survive.

Conclusion

The current market situation and associated employment statistics suggest staying clear of a degree in petroleum engineering. This is reflected in the drop in the petroleum engineering graduates during downturns.

But there is a different perspective: Much of what happened in the last half-decade can be attributed to the unexpected fall in crude oil prices and a hostile environment for new graduates. The unprecedented demand destruction induced by the world’s response to the pandemic notwithstanding, demand for crude oil is expected to grow for the foreseeable future. We see, correspondingly, the reinvigoration of petroleum-engineering-related jobs. Available jobs will be contingent on completing an updated skills checklist that aligns with the transitioned framework of the oil and gas industry—skills which can be integrated in a petroleum engineering graduate program. With careful planning and hard work, current graduates and young professionals currently without work can still position themselves to top candidates when the time comes.

Samuel Ighalo is a drilling advisor, project management, at Halliburton responsible for providing well engineering support to oil and gas operations across multiple regions including North America, Europe, North Africa, the Middle East, and Latin America. He participates in a variety of projects which span the lifecycle of well construction and is involved with business development and the bids/tender process.

As a business development professional with OES Energy Services, Oyedotun Dokun has a blend of shore- and rig-based experience spanning over a decade. He has supervised many successful drilling campaigns worth more than $1 billion for companies such as Chevron, Agip, and Shell.

Leyla Ramirez is a reservoir engineer at Occidental Petroleum with 7 years of experience. She is based in Houston and currently works with enhanced-oil-recovery projects in the Permian Basin.

James Blaney is an engineer on the technical development team at Liberty Oilfield Services. He works with current and emerging technologies to improve efficiency, accuracy, and safety in the field.

Mani Bansal is a reservoir engineer with 3 years’ experience at the Institute of Reservoir Studies, Oil and Natural Gas Corp, and is based in Ahmedabad, India. He currently serves as membership chairperson for the SPE India Section and is involved in SPE e-mentoring, Ambassador Lecturer program, and the Energy4me Advisory Team for Asia Pacific.