Salaries rising for new petroleum engineers

Starting salaries for graduating petroleum engineers continue to rise. At the University of Texas at Austin (UT), Fall 1997-1998 petroleum-engineering (PE) undergraduates expect to receive $52,000/year, an increase of 15% over the prior year. So far, a total of 6 offers have been tendered, including signing bonuses of $2,000. On average, PE undergraduates receive the highest starting salary for all BS engineering programs at UT, with chemical engineering running a close second.

May 4, 1998

4 min read

Dean E. Gaddy
Drilling Editor

On average, PE undergraduates receive the highest starting salary for all BS engineering programs at UT, with chemical engineering running a close second.

Placement data for BS petroleum engineers look promising as well. At UT, where placement by graduation date has averaged 95% over the past 10 years, employment has been a solid 100% since 1996.

Similar trends can be seen at Colorado School of Mines (CSM). Last year's PE students graduating with BS degrees averaged $45,000/year, with a placement level of 100%. According to Ramona Graves, associate professor at CSM, next year's salaries will be even higher and are expected to rise above $50,000. Metallurgists are in second place at CSM, averaging $40,000/year.

Starting wages began to rise only recently throughout the U.S. According to starting-salary survey by the Society of Petroleum Engineers (JPT, December 1996), the median yearly starting salary for 1995-1996 U.S. graduates who obtained 4-year PE degrees rose only 0.07% above the preceding year (Table 1 [16,241]). During 1992-93, average starting salaries dropped to $41,004 from $42,000.

Rising enrollment

PE student enrollment figures are mixed for many of the universities, but the overall trend appears to be headed upward. "This year when I walked into the sophomore class, there were between 50 and 60 students, double the enrollment of last year," Graves said at the SPE/IADC Drilling Conference in Dallas earlier this year. "We were not prepared for it."

At UT, however, undergraduate student enrollment has remained flat from 1996 to 1997, at 144-146 students. Nevertheless, this is a significant improvement over 1994, when only 117 undergraduates were enrolled.

Total enrollment for PE programs at U.S. universities and colleges has rapidly eroded over the past decade. In 1991, there were 1,700 undergraduate PE students enrolled. By 1996, there were only 1,200 students.

"So long as the industry was going down, our enrollment was going down," Graves said.

Unfortunately, just when the demand for engineers is going up, the number of schools that offer PE degrees in the U.S. is declining. In 1991, there were 27 schools that offered PE degrees, today there are only 20.

Industry involvement

Graves attributes CSM's climbing enrollments to the growing presence of petroleum companies on campus. "Schlumberger is the number one [recruiter] at CSM." They are not only hiring PEs, but "electrical, mechanical, and metallurgical engineers," he noted.

According to Jon Olson, assistant professor at UT, recruiters are worried that there won't be enough PE graduates to fill openings. "In some instances, representatives from industry are coming to us to ask how they can help us enroll more students."

This is a strong indication that demand for petroleum engineers will continue.

Organizations such as the American Association of Drilling Engineers (AADE), SPE, and major oil companies are taking steps to increase enrollment. In February, the Gulf Chapter of SPE sponsored a 5-night recruiting effort in Houston to attract high school students, and Mobil Corp. plans to fly 20 CSM student members of AADE to Midland, Tex., this year to tour a big rig.

At some schools, the curriculum is being modified to attract students who are afraid of the cyclic nature of the industry. The petroleum engineering and geological science departments at UT are jointly offering a geosystems engineering and hydrogeology degree. "We feel the interdisciplinary nature of the program will help broaden the students' career opportunities, making them attractive hires in energy and environmental fields," Olson said.