Energy Excellence Awards Champion Chinook Consulting Leverages Canada’s High Standards In Global Market
The Daily Oil Bulletin’s first annual Energy Excellence Awards were held in Calgary on Thursday, May 2. Awards were handed out in 12 categories under the banners of Operational and Project Excellence, Innovation and Research Excellence, and Exporting Excellence.
Over a two-week period we are profiling the champions in each of the 12 subcategories. Today’s instalment profiles the champion in the category Exporting Excellence: Professional Services.
Click here to read about all of the champions and finalists.
Chinook Consulting got its start in the international market on the coattails of a client that wanted predictable service standards overseas. But it was the 2008 financial markets crash that convinced the consultancy of the value of consistently pursuing international diversification.
“Like other companies, Encana tried to source services locally in other countries, but that didn’t work very well. They were used to certain service standards that they wanted to replicate internationally so they turned to us,” says Marius Simon, vice president of operations, Chinook Consulting.
In 2007, Encana Corporation took Chinook’s consultants to France, Oman, Qatar and other countries where it operated. Having dipped it toes in the international market, Chinook then leveraged those initial connections and expanded to other jurisdictions in subsequent years.
Today Chinook provides professional services to oil and gas operators, service providers and energy market groups in over 13 countries and derives about 35 per cent of its revenues from abroad. Simon expects that percentage will continue to grow.
Chinook’s contracted engineers and geologists provide a wide range of services internationally and domestically, including geological wellsite supervision, remote geo-steering, reservoir evaluation, operations geology, oilsands coring supervision, petrographic analysis, geochemistry and engineering services.
With a focus on horizontal multi-frac technologies and unconventional reservoirs, Chinook offers the flexibility to handle large scale, multi-rig, multi-personnel projects with the accountability of a small consulting group.
Over the last decade, Chinook’s international expertise has gained significant momentum, with high-profile consulting projects, including wildcat wells in the Aquitaine Basin in France, offshore exploration in Suriname, development wells in Albania and re-completions in Algeria.
A productive area for international consulting has been jurisdictions that require partnerships in order to gain market access.
“In the Middle East and North Africa, for example, partnerships are mandatory in order to do business there,” Simon says.
The rules of sponsorship in these countries typically stipulate that services be delivered through local companies owned by local people. It’s usually a well-worn path that eliminates problems of bribery and sets out the terms for how money is earned and divided between the partners.
“It’s a very transparent and clean process, but knowing the right people matters,” Simon says.
Collaborative partnerships with the Algerian National Oil Company, Sonatrach and oilfield services company Schlumberger have also put Chinook in charge of project management of national scale, large capital allocations and multi-year projects.
Continuing to expand Chinook’s international work involves “being visible on various media, oil and gas tradeshows and conferences, while fostering current relationships and building on them,” Simon says.
While these efforts have delivered work predictability and growth for Chinook, foreign markets can also be volatile and unpredictable. To manage non-payment risks, Chinook works with the federal government.
“Export Development Canada has been really good to us and provides peace of mind that we will get paid for our services,” Simon says. “We’ve also applied for some funding through the Trade Commission Service, which could be very helpful.”
An advantage in securing work is Chinook’s multiethnic stable of 130 engineering and geology subcontractors. Amongst them, Chinook has people who speak the language of most any target market.
“I would say over 50 per cent of our group speaks another language. That helps a lot,” Simon says.
Currently, Chinook’s best prospects for foreign work are in South America, where horizontal multi-frac technology is starting to breathe new life into marginal and mature fields. Colombia is also a particularly promising market, with its extensive history of working with Canadian companies.
Simon notes that sponsorship arrangements aren’t required in South America or most of the other places where Chinook operates today, so securing work there is the usual combination of marketing, networking, sales trips, tradeshows and conferences.
Eastern Europe is also on Chinook’s radar: Romania, Hungary and Croatia.
Albania used to be a good market for Chinook until its client, former Canadian producer Bankers Petroleum Ltd., was bought by Chinese interests and now has its consulting services provided by Chinese nationals.
The U.S. is a huge potential market for Chinook but, the problem currently is a “buy American- hire American” sentiment, especially among smaller companies, according to Simon.
The Canadian oil and gas industry has some of the most technical, safety and environmental practices in the world, which is knowledge base that differentiates Chinook consultants from the competition.
“As we continue to expand, the opportunities we encounter in our export markets also shape the kind of people we bring into the company in terms of expertise in specific regions or types of geology or language,” Simon says.
“Most of our engineers have extensive international experience. Our clients are looking for this type of experience in their countries ideally, but the common denominator is that they have North American experience. Everybody is looking for that because of horizontal drilling, shale gas and oil expertise as well as the efficiencies that we captured here.”
Click here to read about all of the champions and finalists.