Retirements Creating a ‘Changing of the Guard’
Geologists’ Salaries Jump Again
Salaries for petroleum geologists took another jump in 2006-07 with a weighted average increase of 9.1 percent overall in pay, according to the annual AAPG Salary Survey.
The 2005-06 year’s salary survey showed an overall 16 percent salary increases.
The survey, conducted annually since 1981 by Mike Ayling of MLA Resources in Tulsa, showed the 15-19-year experience category charting the largest increase, with an 18 percent raise in salaries.
Entry-level geologists showed a 9.5 percent increase, with the 3-5 year category geologists’ pay rising 13 percent. The 20-24 and 25-year-plus experience categories also recorded double-digit increases, with 10.3 and 10.5 percent hikes respectively.
The 10-14-year experience category charted a loss of 2.5 percent in recorded salaries -- but Ayling noted the anomaly of this group was due to a lack of adequate data points, as it always has been for this group as it matriculates through the career cycle.
It is this same age category that recorded little entry-level hiring during a downturn in the industry in the early-mid 1990s.
Ayling found that 2006 “showed fits and starts in hiring activity, somewhat driven by the rapid build and then decline in oil prices, which in some cases led to caution on the part of employers.”
The weighted weekly average oil price in 2006 began at $53.28, peaked at $69.52 in August and ended the year at $50.42.
Changing of the Guard?
The survey is based on employed, salaried geoscientists and is based on salaries alone. It does not include bonuses, employee benefits, autos or other perquisites.
It does not attempt to include anyone whose compensation is in the form of consulting fees, retainers or overrides.
The purpose of the survey is to provide a yardstick for those interested in assessing their compensation, and Ayling strongly feels that compensation is often a secondary consideration when evaluating overall job satisfaction.
The survey also is based on U.S. salaries, considered the “gold standard” for the industry. The measurement for international salaries for explorationists is virtually on a country-by-country, case-by-case basis, Ayling said, which makes statistical averaging non-productive beyond the boundaries of the specific country.
Ayling added that many ex-pats are paid U.S.-based salaries, while the national oil companies opt to pay compatriots on a different, lower scale.
Ayling also sees a “changing of the guard” occurring.
“The geoscientists that were the youngsters in the mid ‘70s growth spurt are now reaching retirement (not early retirement) age,” he said. “I was chatting with one recently (who has an incredible record as an oil finder) and he tells me that at 64, he’s ready to do something else. He is fortunate to have made a good deal over the years, and can now take the time to pursue other interests.
“This does not bode well for our industry.”
Meanwhile, Ayling said many geologists in the 20-year category have benefited from the lack of experienced geoscientists.
“Individuals with whom I spoke two years ago have seen their salaries jump from the mid-$120’s to over $165,000 -- for staff level positions. At some point, however, merely paying higher dollars isn’t going to attract talent in sufficient numbers.”
Thus, he noted, job satisfaction becomes a priority for an already-employed explorationist.
While the 2006 numbers again came in strong, Ayling said that he is “concerned about what 2007 has to offer.
“There are rumors of layoffs to be associated with several large industry mergers,” he said. “On the other hand, with a rig count that has doubled since 2003 and grown by close to 20 percent over the past year, activity has continued to stay strong.”
The apparent contradiction of layoffs in the face of increased activity is created by mergers and acquisitions and rumors of such that also cloud the hiring climate in the minds of some managements.
“Individuals with whom I speak,” Ayling observed, “tell me more often that they are looking for a company with a clear purpose in mind, where they feel their contribution is truly valued.”