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Workers fired from U.S. shale fields after the collapse in oil prices could soon have a new boss: the nation some blame for driving that decline.
The state-owned Saudi Arabian Oil Co., also known as Saudi Aramco, is posting new job ads online aiming to snap up experts in extracting oil from shale as the country seeks to become a leader in that rapidly expanding effort. Tens of thousands of U.S. workers have been fired since November as oil prices plunged because of oversupplies, driven in part by an OPEC decision supported by Saudi Arabia.
That’s now giving Saudi Aramco a better chance to lure experienced workers to its own shale formations. Difficult living conditions had previously made the country a hard sell, said Tobias Read, chief executive officer of Swift Worldwide Resources, a recruiting firm.
“We’ve seen people who have historically been reticent to look at Saudi Arabia who are now more accepting of a job there,” Read said in an interview.
For decades, the Saudis have recruited workers from the U.S. for its conventional drilling programs, offering hefty salaries and benefits as lures. Even so, “it’s been hard for us to put people there,” Read said. “The conditions are just quite difficult.”
Previously, Saudi Aramco didn’t need expertise in shale oil and natural gas exploration because it has large conventional oil reserves that don’t require expensive extra steps to develop, such as the hydraulic fracturing or horizontal drilling used in shale rock.
As those highly productive fields age, however, development of shale resources, along with other hard-to-reach oil categorized as “unconventional,” may help Saudi Aramco maintain its dominance in the oil market, according to John Kingston, president of the McGraw Hill Financial Institute.
“With the layoffs, it’s a great time to do it,” he said about the recruitment effort.
Nigel O’Connor, a spokesman for Saudi Aramco didn’t answer questions on the specifics of the company’s campaign, or its timing. “To support the implementation of our strategy and continued growth, Saudi Aramco continues to hire expertise in a number of technical areas across the unconventional gas resource value-chain,” he said by e-mail.
In November, the Saudis led a decision by the Organization of Petroleum Exporting Countries to maintain production levels of its 12 member countries despite falling prices. The hiring campaign comes after some U.S. oil chiefs, including Continental Resources Inc. CEO Harold Hamm, blamed the Saudis for causing the North American cutbacks.
In February, Saudi Aramco posted several new ads on websites including Rigzone and LinkedIn that focused on shale expertise. One recent LinkedIn listing for a petroleum engineer with shale experience drew 160 applicants in a month, according to data from the professional networking website.
“Consider the opportunity to join our team and help shape the future of key global unconventional resource development,” the ads say, referring to shale-rock exploration that’s led to a renaissance in U.S. oil and natural gas production.
Additionally, since the start of the year, Saudi Aramco has added an “unconventionals” category to its recruiting website, where 35 job listings require specific experience in shale. A recruiting company, Whitney Human Resources, has also written directly to prospective employees on Saudi Aramco’s behalf.
A February letter from Whitney obtained by Bloomberg News said there are three areas of the country where Saudi Aramco has an “active exploration program” for unconventional gas resources.
“Senior managers from the company will be in North America in the forthcoming months to meet professionals with your background who are interested in joining this exciting development,” the letter said.
A recruiting professional at Whitney declined to answer questions about its work with Saudi Aramco.
The nation is interested in developing natural gas in its shale formations to help replace the equivalent of 900,000 barrels a day of domestic crude and fuel oil used to generate local electricity supplies, according to a March 10 research note by a team of Barclays Plc analysts including David Anderson in New York.
On a recent trip to the region, the analysts learned that Saudi Arabia fears damaging its oil- and-gas-rich formations with shale drilling, which could hurt future production, Barclays said in the note. To date, only eight shale gas wells have been drilled in the country with plans to drill 135 wells over the next 3 years.
“Soon, Saudi Aramco will be known not just for conventional oil and gas production, but as a leader in full life-cycle unconventional gas development,” the company said in a recent ad.
Saudi Aramco’s shale recruiting efforts are akin to a Chinese factory running a U.S. factory out of business, then trying to hire the unemployed workers to improve operations in China, said Michael Webber, an associate professor at the University of Texas and deputy director of the Energy Institute.
After watching the U.S. shale revolution collapse on low prices, Saudi Aramco is seizing the opportunity to bolster its own expertise in shale.
“They don’t want to start from scratch,” Webber said. “They have no experience with shale and they have to hire outside workers. It’s a way to leapfrog.”