The Law of Supply and Demand works every time -- and salaries for petroleum geologists reflect respect for the law.
Petroleum geologists’ pay rose about 16 percent overall in the past year as the scuffle for exploration manpower continued after two years of steady growth in oil and gas prices. Ah, supply and demand; it works every time.
The annual AAPG EXPLORER salary survey showed rises in every age and experience category with salaries for geologists with 6-9 years growing 21 percent and 23 percent for seasoned geologists with 20-24 years of experience.
“The employment surge has become near frantic as companies seek to build staff and stave off the recruiting efforts of competitors,” said Mike Ayling, of MLA Resources in Tulsa, who has conducted the salary survey since 1982.
He said the last year “has shown a strong continuation of the hiring pace that picked up toward the end of 2004,” when that year ended with a West Texas Intermediate Crude average price of a whopping $41.51, according to the EIA. The average price in 2005 was $56.64.
With the product price holding high, Ayling said companies have stepped up hiring even over the quickened pace in 2004, which resulted in an overall salary increase of 8 percent.
“Major oil companies continue to hire entry level geologists with master’s degrees only, and the competition for candidates has led to significant compression woes for previous hires over the past five years,” Ayling said.
In order to lessen the “compression effect” on their geoscientists hired off campus in recent years, many companies are paying sign-on cash bonuses of up to $15,000 to the newbies to attract them to their company.
That big cash for new hires also has put pressure to sweeten the package of geologists with less than 20 years of experience to avoid internal problems -- or to keep those slightly older geologists from jumping ship to another company.
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.
In the AAPG survey, age groups that showed the lowest rises in pay over the past year was the 10-14 year range, with 6.42 percent, and the 15-19 grouping with 3.10 percent. Ayling noted that there were two major factors involved:
- These groups historically have had smaller data points because they entered the industry when smaller numbers were hired on the entry level.
- Both of the groupings showed double-digit salary gains in 2004-05, which other age groupings did not -- and with their base elevated, the percentage gains were lower.
Ayling said this group was the first to see a burst of recruiting activity the previous year.
Ayling also noted that over 50 percent of the data points represented individuals with over 20 years experience -- which indicates the boom-bust hiring practices of the past and the acknowledged aging work force.
So are those hiring practices a thing of the past? Yes and no, Ayling said.
“There are still unrealistic expectations in many areas,” he said. “For instance, there still is an expectation on the part of some companies that they have to go to one of the well-known schools to get new hires. There are a lot of smaller schools that have excellent prospects, and some are not flexible in the way they look at filling their positions.”
2005 Geological Salary Survey
|
YEARS EXPERIENCE
|
HIGH
|
AVERAGE
|
LOW
|
|
0-2
|
$85,000
|
$74,400
|
$65,000
|
|
3-5
|
86,300
|
81,300
|
75,000
|
|
6-9
|
145,000
|
95,400
|
75,000
|
|
10-14
|
150,000
|
114,400
|
100,000
|
|
15-19
|
132,000
|
119,600
|
106,000
|
|
20-24
|
208,000
|
139,000
|
96,000
|
|
25+
|
215,000
|
134,100
|
100,000
|
Average Salary by Degree
|
YEARS EXPERIENCE
|
B.S.
|
M.S.
|
PH.D.
|
|
0-2
|
$68,500
|
$74,400
|
$82,500
|
|
3-5
|
75,000
|
81,700
|
86,300
|
|
6-9
|
85,000
|
97,300
|
85,000
|
|
10-14
|
135,000
|
112,800
|
103,000
|
|
15-19
|
132,000
|
113,900
|
129,900
|
|
20-24
|
134,400
|
133,600
|
156,000
|
|
25+
|
122,200
|
136,600
|
215,000
|
Historical Averages
|
YEARS EXPERIENCE
|
AVERAGE SALARY
|
|
|
2000
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
|
0-2
|
$53,600
|
$59,700
|
$64,000
|
$65,000
|
$65,600
|
$67,800
|
$74,400
|
|
3-5
|
61,400
|
66,000
|
67,500
|
71,200
|
67,700
|
75,600
|
81,300
|
|
6-9
|
78,400
|
74,200
|
74,500
|
78,300
|
75,700
|
77,500
|
95,400
|
|
10-14
|
83,400
|
89,400
|
95,000
|
96,600
|
91,900
|
107,500
|
114,400
|
|
15-19
|
94,900
|
100,600
|
99,400
|
102,500
|
102,500
|
116,000
|
119,600
|
|
20-24
|
107,700
|
111,700
|
111,600
|
113,900
|
118,100
|
112,800
|
139,000
|
|
25+
|
104,400
|
117,300
|
124,000
|
126,900
|
125,100
|
128,300
|
134,100
|