Energy companies scurry to find qualified drilling crews

ORGAN CITY, La. -- The day after Diamond Offshore's new roustabouts finish their training here on the Mr. Charlie offshore rig, they are off to one of the company's rigs in the Gulf of Mexico.

The rapid move from training school to the real world not only demonstrates the Houston drillers' urgent need for workers, but it also shows that a trained roustabout, even with only rudimentary knowledge, is a prized commodity these days. Diamond Offshore doesn't want another company to snatch away a worker it just spent $1,000 to train.

"We spend a lot of money on training, so we like to get them right out to a rig as soon as possible," said Allen Kelly, manager of training at Diamond Offshore. A shortage of qualified personnel has been a nagging problem since the oilpatch has come back in the past year. But over the next two years some 50 new offshore jack-up rigs, semi-submersibles and drill ships currently being built or converted will go into operation. Finding qualified crews to operate these increasingly high-tech drilling rigs is a major worry for drilling companies. "A lot of the companies saw this coming, but now it is starting to approach critical mass with all of the heightened activity in the Gulf," said Steve Kropla, director of accreditation and certification programs for the International Association of Drilling Contractors. The value of a trained rig crew these days cannot be underestimated. Houston's Cabot Oil & Gas had to shut down a land well it was drilling in South Texas for about 10 days after the rig's entire crew was hired away by another driller, said Ray Seegmiller, president of the Houston energy company. While training rig crews for its wells is not Cabot's responsibility, the company is paying closer attention to the experience level of the crews on its wells. "Before things picked up, you generally had the best crews available," Seegmiller said. "Now, you have a lot of fill people and there are some pretty green hands out there. They are spreading out the experienced hands so there are at least one or two good guys on every crew." A total of 56 percent of energy companies surveyed are concerned about the availability of enough qualified drilling crews in 1998, according to a recent poll of worldwide oil and gas exploration and production expenditures by Salomon Smith Barney. At this time last year, only 23 percent were worried about having enough personnel. The explanation for how the industry got into this personnel pinch is simple. From 1983 to 1993, the oil and gas industry shed about 400,000 jobs. Many of the people who lost their jobs at that time have moved into other industries and are not eager to once again bet their livelihoods on the caprices of the oil industry. "Why are we here? We are here because we have been downsizing; we haven't looked after our people," said Andrew Bakonyi of RB Falcon, the world's largest offshore drilling company, recently. "We can't just go out and hire tool pushers with 15 years of experience from anywhere. You have to grow them. You have to train them, and you can't just transfer those people from other industries." While all the drilling contractors are running schools to staff their rigs, that won't be enough. The crunch is forcing these companies to consider developing industrywide training programs. While the companies still train their own workers, the drilling contractors association recently has been meeting with a group of companies to look for ways to reduce the lead time needed to train workers for these new rigs. "We are trying to draft some sort of generic industry product for training," said Casey Brooks, director of training at Houston-based RB Falcon. The Mr. Charlie was the industry's first offshore jack-up rig and also is home to a museum on offshore life. The new roustabouts share the rig with tour groups during the day. Diamond Offshore's use of a real offshore rig for training is a first in the industry, although land drillers such as Nabors Industries also train their workers on actual land rigs. The workers learn safety procedures and basic job skills, but they also are given a taste of what it's like to live offshore for an extended period. The workers learn how to adapt to the pace of working offshore, where the typical schedule is two weeks on and two weeks off, working 12-hour daily shifts. They arrive on Sunday night and are not allowed to leave the rig until Friday afternoon. They are allowed only limited use of the telephone. So far, it has been paying off. Turnover rate among the new recruits -- typically the highest among the various jobs on a rig -- has dropped by 30 percent. Accidents on the company's rigs have declined 60 percent. The company has run 420 new roustabouts through the weeklong training course. It will train 20 people a week for the rest of 1998. Most of the recruits are in their 20s, with the oldest being 38 years old. Only four people have quit. "I can't imagine going offshore without this sort of training," said Terence Dumas, 30, a single father from New Orleans who was in a recent class. "I don't want to end up missing a finger or a leg." Dumas is typical of the new recruits: He has no experience in the oilpatch. The chief qualification for the new roustabouts, Kelly said, is a willingness to work hard. Ask them why they want to get into the offshore oil business and most say it is simply for the money. An average salary for a new roustabout is about $13 an hour, according to the association of drilling contractors. To keep them, even at entry-level jobs, the drilling companies must pay them more than they did in the past. Jeffrey Chastain, director of investor relations at Transocean Offshore, estimates that labor costs are the highest overhead component of an offshore rig's daily costs, about 60 percent to 65 percent. And those costs are rising. "We are seeing significant wage pressure in order to attract qualified people," Chastain said. RB Falcon puts green hands through a four-hour course on shore before sending them to an offshore rig, where they receive further safety training prior to starting work, Brooks said. "Our focus is on-the-job training," Brooks said. Entry-level workers have the highest turnover rate on a rig crew. Often this is because they can be lured away with the prospect of more money. But roustabouts also usually are looking at their job not as a long-term career, but as a way to make relatively good money in a short period of time. "I don't think people coming into these positions put as much value on things such as benefits and 401(k) plans," Brooks said. The training at Mr. Charlie won't solve the biggest problem facing drillers: finding people for the higher-skilled positions on offshore rigs. RB Falcon needs more technology-savvy employees to work on its drill ships and semi-submersibles, where computers increasingly are used to run automated drilling procedures. Not everyone who has had a traditional oil-field background is cut out for these types of jobs, Brooks said. Because of the fierce competition for employees to work offshore in the Gulf of Mexico, RB Falcon has begun seeking workers from maritime academies and from depressed industries such as coal mining and timber. They have job skills similar to those needed on a rig, including a familiarity with hardware, tools and equipment, such as cranes and pumps, used in all heavy industries. The company has begun recruiting in other parts of the country because it faces so much competition closer to home from oil-field service companies and shipyards on the Gulf Coast. The military has been the best source of new employees for RB Falcon by far. Former military personnel are used to a strict chain of command like that found on an offshore rig. They often have some technological training, and in some cases are used to being isolated -- such as being on a ship, Brooks said. Transocean Offshore started a school for its entry-level roustabouts last year and so far has graduated about 350 new workers for its rigs in the Gulf of Mexico, Chastain said. The company estimates it will need 400 to 500 new employees to man three new offshore rigs and a drill ship it is putting into service this year. Workers live at the Transocean school for two weeks. They are taught basic safety skills, familiarized with much of the equipment they will encounter offshore and are taught basic maritime skills, such as how to tie a proper knot. Transocean also tries to get its workers from school to one of its rigs as soon as possible to ensure its training investment does not go to benefit a competitor. "We don't want to be in a position where we are training people for the industry," Chastain said. "We want to get them and be able to keep them." Global Marine, which last month christened its first new offshore rig in 14 years and put a converted drill ship into operation, shops for its new recruits at technical schools across the nation, said John Ryan, chairman of the Houston company. Global Marine has found that by recruiting from the trade schools, it tends to find workers who are willing to make a commitment, more so than people off the street with no experience. "If they are willing to pay a tuition to educate themselves, it is evidence of a higher level of commitment," Ryan said. Global Marine has had such success in recruiting from at least two such schools that Ryan will not disclose the names for fear his competitors will muscle in on a good thing. The company has less of an urgent need for entry-level workers than a need for those in the more highly skilled disciplines, such as subsea engineers, dynamic positioning engineers, barge masters and chief electricians. "We spend about $5 million a rig in training costs," Ryan said recently. Nabors Industries, which has 385 land rigs, has had an extensive training program for years but opened a school in Houston about a year ago that trains entry-level roughnecks on a land rig. So far, the company has graduated about 400 people from the school, which handles two 20-person classes a month, said Dennis Smith, spokesman for the Houston company. The company also provides courses for other workers seeking to get into higher-paying, higher-skilled jobs. Nabors has not had to delay or postpone any jobs because of a lack of qualified hands for its rigs, but it has been forced to operate rigs with less experienced crews than it would prefer, which can indirectly affect costs, Smith said. The company has had such success with its Houston training facility, it is in the process of establishing similar facilities both in California and in the Rocky Mountains, said Charles Graham, director of training for Nabors. "We have seen our retention rate increase to about 75 percent on these entry-level positions since we started this school," Graham said. "While we are trying to upgrade our work force, we also hope these men will want to make the oil business their careers."

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