Sept. 29, 2000, 8:17PM

Oil-drilling companies find it difficult to round up workers Bloomberg Business News

MIDLAND -- Third-generation Texas oil producer Bill Graham would like nothing better than to drill for more crude to add to the 10,000 barrels a month his wells pump now. If only he could get a rig.

In July, flush with cash after prices tripled in the previous 18 months, Graham called a drilling contractor to order four new rigs. The contractor told him it would take four months. The problem wasn't a shortage of equipment. It was a scarcity of the roughnecks and roustabouts needed to run the rigs.

"So many people left in the last downturn, they can't get crews," said Graham, 47, president of Bill G. Graham Oil & Gas Co. in Midland. "Now, prices have recovered, we've got prospects to drill, and we don't have enough people to work."

Two years ago, when oil was around $10 a barrel, companies shut down wells and stacked unused drilling rigs to stem their losses. Now, with oil above $30, Graham and some other producers are finding it difficult to exploit the rally.

Higher crude prices have highlighted U.S. dependence on oil imports and have prompted a renewed call from some political leaders for increased domestic production. U.S. output is down nearly 40 percent from the peak in 1970 of 9.6 million barrels a day.

In Texas, the nation's leading producing state, the search for new oil has been slowed by an economy that has pushed unemployment to its lowest rate in 21 years.

Exploration companies in the state have been forced to compete for workers with such businesses as restaurants, airlines and electronics companies.

North American drilling prospects are "very, very high, and people are very scarce," Gary Morris, chief financial officer of Dallas-based Halliburton Co., said last week. Halliburton is the world's largest oil field-services company.

In the past few months, oil and natural gas exploration companies in Texas have begun adding jobs for the first time since mid-1998, and they have been offering higher salaries to attract workers.

There were 135,300 jobs in the exploration industry in August, up from 134,100 in April, according to the Texas Workforce Commission. Still, employment is down about 17 percent from December 1998's 162,500.

This summer, Helmerich & Payne Inc., a Tulsa-based drilling and exploration company, raised roughnecks' wages by 40 percent and gave 25 percent raises to drillers, a company official said.

Job seekers can afford to be choosy.

Last year, most students from Texas A&M University's petroleum engineering department were lucky to graduate with one job offer in hand, said Charles Bowman, head of the department. This year, Bowman expects most students to get two or three offers.

"The recruiting season is extremely strong," he said. "When people are drilling wells, these companies have a lot of work. They need more people than we can possibly supply."

http://www.chron.com/cs/CDA/story.hts/business/energy/685957

-- Martin Thompson (mthom1927@aol.com), October 01, 2000