North Dakota oil industry suffering labour shortage

Oil output in North Dakota fell by 1% in June 2017, but experts are optimistic it will remain above 1 million barrels per day for the foreseeable future, according to Reuters.

A major problem in the state is a lack of experienced oil industry workers. Today there are only 25 frack crews in North Dakota, less than half the number of rigs.

North Dakota is the US’ No. 2 oil producing state, however, Reuters observes that in the last 12 months it has ‘taken a back seat’ as companies in the Permian Basin of Texas and New Mexico – the largest oil field in the US – compete with the Organisation of the Petroleum Exporting Countries (OPEC) for dominance in the global energy market.

"That's two elephants fighting it out and North Dakota gets caught in the middle," Lynn Helms, head of the North Dakota Department of Mineral Resources, said in a conference call with reporters.

According to Reuters, optimism in the state comes from shale producers developing new technology and implementing process improvements to survive low oil prices.

North Dakota pumped 1.03 million barrels of oil per day in June, down from 1.04 million bpd in May, according to the DMR.

"We should be staying in that 1 million to 1.05 million per barrel range for the foreseeable future," Helms said.

The drilling rig count, which is often taken as a measure of the health of the state’s oil industry, has been steadily rising, currently standing at 4% higher than in June. However, the labour shortages have meant that even as the rig count rises, fewer wells are actually being fracked.

Plunging oil prices last year forced thousands of redundancies in North Dakota’s oil industry, forcing many workers to leave the state.

"The oilfield service providers are training people, but the operators are not happy with the performance of inexperienced crews," Helms told Reuters. "It's been a struggle."