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Wednesday, July 20, 2016

Depleted Workforce and Other Factors Slow Oil Industry Revival

From Reuters:
Two years ago, Reg MacDonald's 20-day drilling classes were packed to capacity, with nearly 40 students eager to land lucrative jobs in the booming oil and gas industry. Now he is lucky if he gets half a dozen to enroll. 
The latest rout in oil prices has been the last straw for many workers just getting back on their feet after the last downturn in 2008, said MacDonald, president of Maritime Drilling Schools Ltd in Nova Scotia, Canada, which trains both entry-level and experienced workers for oilfield jobs all over the world. 
"It's not stable. It's too cyclical. You get ahead and you lose," said MacDonald, who has been in the industry since the mid-1970s. 
Supply outages brought oil prices close to $50 a barrel that many U.S. shale producers say they need to lift output, and drilling has picked up in some of the best oil patches. 
Conversations with larger producers, contractors and suppliers suggest, however, that any recovery will look very different from the 2009-2014 shale boom that nearly doubled U.S. crude output and turned it into one of leading global producers 
The loss of thousands of workers during the two-year downturn and dearth of candidates to replace them is just one challenge.

Oil professionals also talk about equipment idled for so long that it has become unusable, rising service costs, and the threat of extra supply from the backlog of drilled-but-uncompleted wells.
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