The oil patch appears to be growing.
The oil and gas industry in Alaska employed 13,600 people in June, according to recent figures from the Alaska Department of Labor and Workforce Development. That’s up from 13,200 in May of this year and up from around 12,300 at this point last year.
While the figures show jobs declining slightly in the Anchorage-area — to 2,550 so far this year compared to around 2,600 at this point last year — and increasing in the North Slope, those numbers don’t tell the whole story about the employment picture in Alaska, according to Bill Popp, CEO of the Anchorage Economic Development Corp.
First, Popp said, employment in Southcentral could soon increase considerably.
“We’re treating it more as a statistical anomaly than a loss of employment here in Anchorage,” Popp said about the dip in Anchorage oil industry employment totals.
That’s because, Popp said, Cook Inlet is on the verge of its most active period since the late 1990s, when Forcenergy installed the Osprey platform and Cross Timbers Oil (now XTO Energy, an ExxonMobil subsidiary) acquired the Middle Ground Shoal field.
Recent announcements
That assessment is the result of several recent announcements, Popp said.
First, Escopeta Oil Co. expects to have a jack-up rig in Cook Inlet in August and Buccaneer Energy Ltd. expects to bring another jack-up to the region next year.
Second, the major independent Apache Corp. continues to conduct early exploration work on its newly acquired Cook Inlet leases and Houston-based Hilcorp Energy Co. recently acquired the assets of longtime Cook Inlet player Union Oil Co. of California.
While neither Apache nor Hilcorp have revealed details plans for Cook Inlet, Popp noted that both have suggested that they each plan to make significant investments.
“All four companies are very motivated in their search for oil, and oil is going to generate a lot more jobs for the Cook Inlet than gas production,” Popp said.
Combined, those programs could easily offset the jobs lost from the shutdown of the liquefied natural gas export terminal in Nikiski, at least in numeric terms, Popp said, noting that it is still important to make sure the actual workers find new industry jobs.
North Slope jobs growth
The North Slope presents an almost inverse situation.
While the North Slope is seeing an “appreciable” increase in employment, Popp said, it appears to be associated with maintenance and development rather than exploration work.
So although the industry is adding employment, “when you look at the longer term view of barrels in the TAPS system, we still have not addressed that,” Popp said.
Historically, oil industry employment in Alaska follows oil prices more closely than any other factor, including production. While the delivered price of Alaska North Slope crude oil was around $75 per barrel last summer, it is currently trading above $110 per barrel.
—Eric Lidji
