Going Global Is An Opportunity For Many Alberta Service Companies; Study Aims To Help

Many aspects of Alberta’s oil and gas service and technology sector could be exported, and a soon-to-be-released study aims to provide companies with a useful tool when looking to access viable foreign markets.

“We believe the result of this study will be to position, educate and ultimately assist Alberta industry, really trying to get Alberta oil and gas supply-chain companies to better understand some of the international business development opportunities,” Tim Hazlett, director of upstream oil and gas services and technologies at Alberta’s Ministry of Economic Development and Trade, told this week’s Canadian Global Exploration Forum (CGEF) conference.

“You are going to notice that the study most definitely is geared more towards companies that are starting out or are beginning to internationalize, as opposed to the more mature and more experienced oil and gas service companies that are international in nature.”

The Petroleum Services Association of Canada and CGEF — in partnership with JuneWarren-Nickle’s Energy Group and with the support of the Government of Alberta, Export Development Canada and Business Development Bank of Canada — have developed this new, comprehensive report called Going Global: Helping Canadian Companies Navigate International Opportunities (DOB, Oct. 13, 2016).

Quantifying countries with the best export-market opportunities based on oil and gas production asset size and maturity, as well as how those assets match up with Alberta’s competencies in heavy oil and unconventional resource development and enhanced oil recovery, the study also offers qualitative analysis from literature and interviews on the business structure in the various potential markets, offering recommendations on how to approach these markets.

According to Bemal Mehta, senior vice-president of energy intelligence at JWN, many service and supply companies had not sought markets outside the Western Canadian Sedimentary Basin prior to the downturn, but instead developed leading technologies for the domestic energy sector. As the price of oil dropped, those companies had not necessarily “planted those seeds” in new areas, but many of those companies have talents that could be exported.

“What we tried to cover off in these studies were things like market overview and understanding where there are resources where we actually have expertise — heavy oil, unconventional and enhanced oil recovery, and coalbed methane,” he said, adding the study includes elements around infrastructure, what is happening with pricing, what is happening politically, economically and socially within particular markets.

“The approach we took was a triage. We tried to get 120 hydrocarbon-producing countries down to about 16 that we could do a bit of a deep dive on,” noted Mehta. “These countries represent … markets that we felt [Canadian] service and supply companies could make their first foray into.”

Countries included in the study are the United States, Mexico, Columbia, Peru, Brazil, Argentina, Norway, the United Kingdom, Russia, Saudi Arabia, Qatar, United Arab Emirates, Iran, China, Indonesia and Australia. Phase 1 of the report, to be released next week, deals with the Western Hemisphere countries.

“The study that is going to be released next week won’t have any ranking of these 16 countries. At this point it is information. There will be a study coming out in a few months that will have more information on how we rank these countries for suppliers.”

Phase 2 of the report, to be released in 2017, will also cover those remaining countries from the study. Those wishing to be the first to hear details and receive a copy of the Phase 1 report can register for the complimentary launch at a Calgary location (details provided upon registration) on Oct. 19, from 7:30 a.m. to 9:30 a.m.

Hazlett said: “The Going Global study is a study I really think takes into consideration Alberta’s and Canada’s true competitive advantage — that being Alberta’s oil and gas services and technology — and ultimately will aim to quantify what countries offer the best export market opportunities, based on the size and maturity of the oil and gas production assets, and how well those assets match up with Alberta and Canadian capabilities and capacities.”