• Tue. Dec 6th, 2022

Texas added 2,800 upstream jobs in the oil and gas industry last month, according to industry group analysis

ByRobin H. Purcell

Nov 25, 2022

Texas continued to add jobs in the oil and gas sector in October, a sign energy companies expect global demand for oil to remain strong as a supply crunch keeps prices high.

The industry added 2,800 jobs last month, according to an analysis of Texas Workforce Commission data by the Texas Oil & Gas Association, an industry trade group. Employment in the state’s upstream sector, which includes extraction and manufacturing, reached 207,000 in October, up more than 20 percent from 170,500 jobs at the same time last year.

The group also said September figures have been revised upwards to 2,200 jobs, from the 900 originally reported.

“Texas oil and natural gas producers continue to create jobs as our state’s economy continues to grow even amid high inflation,” said Todd Staples, president of the Texas Oil & Gas Association.

According to a September survey of Dallas Fed energy executives, companies are reporting rising resource costs due to inflation and expect these cost pressures to continue into next year.

When Russia invaded Ukraine earlier this year, it pushed oil prices to multi-year highs. The war also exacerbated supply chain issues stemming from the pandemic, making it harder for companies to get the resources they needed. Inflation has caused them to pay more than they have in recent years when they can secure parts and equipment.

The companies also told the Dallas Fed that they are still short of workers. Another industry group, the Texas Independent Producers and Royalty Owners Association, analyzes job postings for work in the oil and gas industry. It is said that there are currently over 1,500 openings for oil exploration jobs and another 3,800 for oil and gas support services in Texas.

Still, companies have managed to add about 50,000 upstream jobs in Texas since the lows during the COVID-19 downturn, according to the Oil & Gas Association. Since September 2020, which the group defines as the COVID low point, the upstream sector has recorded an average increase of 2,000 jobs per month.

While the industry has added jobs since drilling nearly halted in 2020 due to the pandemic, analysts say growth has been more measured as companies respond to investor calls for capital discipline. Thanks to high oil prices, Texas jobs are back above 200,000 this year, but when oil prices surpassed $100 in 2014, the state employed more than 300,000 people in the upstream sector.

Even with prices high this year, companies have chosen to stick to projected production schedules for the most part, resulting in record profits. That has allowed companies to offer larger payouts to investors, many of which have been burned by companies that over-invested in shale basins over the past decade. Investors have pressured companies to focus less on growth and more on increasing efficiency and shareholder returns.

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