The well drilling and servicing businesses have been very prosperous the last few years. The industry, although, has been marked by an extreme cyclical past that discouraged capital investment. It doesn’t feel too good to have a multi-million dollar piece of equipment collecting weeds somewhere in a field. When oil began to rise a few years ago, demand for drilling came back and rotary giants came back. The interesting thing is that although equipment can come and go, what about people?
Many people who in the late 70’s or early 80’s had done well in the oil business saw there returns diminish over the next two decades. Talented people tend to be able to switch gears, therefore, many of them moved on to more profitable endeavors. The average family oil business struggled for many years as oil prices languished. Funny, I don’t recall hearing such outrage from politicians as has been witnessed lately. For the people that stuck it out and invested when times were bad, they are now reaping the benefits of the flip side… to punish them for risk taking is un-american.
Now that times are booming, it is not necesarily the equipment that is missing, but the human capital. People make things happen. I am sure many of them did not want to get back into oil just to see it languish again, so they waited it out. This has led to a lack of skilled labor in oilfields all over America. Human capital will always be more important than any piece of new equipment in the oilfield. Crude Oil Facilitators website.