Big money in oil? I’ll take a pay cut just to get a job now, undergrads say

KUALA LUMPUR, Jan 19 ― They used to dream of a RM7,000 basic monthly salary in their first year of employment, with thousands of ringgit more just from allowances. But now, petroleum engineering students say they have doubts about their career choice as they witness the oil & gas (O&G) industry lay off tens of thousands of workers worldwide.

Malay Mail Online spoke to several petroleum engineering students who said much of their optimism and confidence for a solid career in the O&G industry has been shaken after seeing the unexpected prolonged oil price rout ravage what was once considered the most stable and lucrative job market.

They related how they were lured into studying petroleum engineering by expectations of a five-figure salary during the oil boom years. But now these students are sobering up to the fact that they may be jobless as the industry takes a scythe to their skilled workforce.

“I don't mind taking a pay cut. Anything. As long as I get a job. I know it's hard to get a job in O&G now so getting a job itself is already good enough,” said Jason, a 21-year-old engineering student with HELP University who had planned to take up petroleum engineering in the US.

According to a Forbes report last October, today’s “great depression” in the oil market has claimed more than 200,000 jobs worldwide, with 2 per cent of the casualties from Malaysia.

More cycles of retrenchment are expected this year as the oil price slump is forecast to continue up until 2020, industry observers said.

State-owned Petroliam Nasional Berhad (Petronas) has also predicted the next two to three years will be tough as it grapples with falling crude oil prices while seeking to keep its multi-billion dollar projects on track. Brent crude oil price dipped below US$28 (RM123) a barrel yesterday on the prospect of more supply from Iran amid a saturated market.

For Jason, even the prospect of an oil price rebound in the coming years has failed to rebuild his confidence in the fossil fuel market.

He has since changed his study course to mechanical engineering, a career he deemed to be more stable than the volatile O&G industry.

But the study swap mid-stream comes at a high price. A year at a private university like HELP costs around RM25,000. Jason was already in his third year.

Career change an option?

Not all oil students are as fortunate as Jason who admitted his family is well-to-do. Arif Hazman, a second year petroleum geoscience student at the prestigious Universiti Technology Petronas (UTP) in Perak, said starting a new study course is not a viable option due to his middle-class background

“To be honest I am quite worried about my future. It looks very tough… when I enrolled, my course produced among the most sought-after graduates. But that was of course before the oil price drop,” he told Malay Mail Online.

Like many of his peers, Ariff never thought he would see the kind of panic gripping the oil industry today. When he applied for a spot in UTP, he expected to make big money in oil after graduating. According to salary consultancy firm, Payscale, the average pay for a petroleum engineer in Malaysia was RM119,358 a year as of September last year.

Now Ariff says he is thinking of pursuing a Master's degree in hopes it could lead to wider career options than what his current degree can offer. For a petroleum geoscience student, the career option is in upstream, which happens to be the sector with the most layoffs. But again, doing a postgraduate course means coughing up more money. A year at UTP costs upwards of RM18,000 in tuition fees and accommodation.

“Maybe I can teach. I'll have a few years to wait it out,” he said, hoping for the oil market to stabilise, “And then see what I can do.”

KS Ng, director of executive recruitment firm Career Channel, said the hiring prospect in the upstream sector is virtually non-existent right now. Providing a glimpse into the bleak employment situation in the O&G industry, Ng revealed how his company was forced to close a newly set up division that was meant to specialise in poaching talented upstream oil workers.

“We had set the division up mid last year but it was tough and it didn't really kick off. This side of business did not give us the desired results so we had to shut it down,” Ng told Malay Mail Online, adding that the company has shifted its focus back to recruitment for O&G's managerial jobs, which Ng said was still surviving.

“Even so, companies are still retrenching,” he added.

Adjust and adapt

Malay Mail Online reported last Monday that skilled foreign workers, upstream and downstream, were the first to be laid off due to their high salaries. Although this gives Malaysian staff temporary relief since their lower salaries means their employers can still afford to keep them, uncertainties remain.

Malaysian Employer Federation president Datuk Shamsudin Bardan said petroleum engineering graduates must now adjust their expectations and adapt to the volatile environment by adopting and honing new skills, the best bet to secure employment.

“For graduates without experience, it is very bleak,” he told Malay Mail Online when asked about employment chances in the O&G industry today. “Be realistic. You need to try and seek employment that is not related to the field. Don't be sticky about wages. Since it is the private sector, they pay based on your performance. So if you perform they will pay you accordingly,” he added.

But not all options are lost even as massive layoffs means graduates face stiffer competition for limited jobs. According to Ariff, many of his seniors who graduated amid the oil market bust had surprisingly landed jobs ― but in smaller companies or contractors and with much lower pay.

“That's quite a surprise actually. A lot of the seniors I know got jobs. But with smaller companies lah. But I think that's good enough for now considering the situation. If me I wouldn't mind getting a lower salary too. As long as I get a job,” he said.

Despite the uncertainties clouding over the oil industry today, there are no hard data to show the number of students changing courses or a drop in enrollment in petroleum engineering. There was also no data to show how many of these students managed to secure a job or are jobless.

One of the local varsities that offers the course, Universiti Kuala Lumpur, claimed they have not seen a drop in applications for their petroleum engineering course.

“It hasn't affected the applications yet. But I'm not sure about the future though. Let’s see in the next few years,” said a marketing official.