Petroleum Services News - Winter 2010 by Venture Publishing

WINTER 2010

NEWS

PSAC introduces a new name and look for your magazine

PLUS: Results from the 2010 Drilling Activity Forecast • Challenges to consider as recruiting ramps up Fuel management company safeguards its workers • Message from PSAC’s new president PM#40020055

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CONTENTS

WINTER 2010

Departments 4 7

MESSAGE FROM THE CHAIR 2011 DRILLING ACTIVITY FORECAST Could increased activity be on the horizon for 2011?

IN THE FIELD All the news, events and latest announcements

PSAC REACHES OUT

PSAC reaches out on behalf of the services sector in its Public Outreach Program

PSAC IN ACTION

FROM THE DRILLING ACTIVITY FORECAST EVENT

PSAC delivers the report on the services sector, and we’re all in for some big surprises

Environmental Refuelling System Inc.’s Frac Shack keeps workers safe in tough conditions

YOUR COMMUNITY

911 Industrial Response Inc.

COVER

OIL AND GAS SERVICE IS BIG BUSINESS

Ramp up your recruitment without getting employees down

MEMBER PROFILE

PSAC’s annual event continues to draw crowds

The latest developments in what PSAC is doing for its members and industry

BUSINESS MATTERS

Features

HEAD OF THE CLASS Announcing the winners of PSAC’s Education Fund

20 PETROLEUM SERVICES NEWS

MESSAGE FROM THE CHAIR

Ready to Raise Our Profile

AM HONOURED TO BE WRITING TO YOU

as the incoming 2010-2011 Chair of the Petroleum Services Association of Canada. I look forward to my job of raising the profile of the oilfield services sector as we come out of what could arguably be the worst economic downturn of our time. I started in the services sector during the boom times of the late ’70s in Fort St. John, B.C., as a mud man with Halliburton and have endured at least three downturns, and the National Energy Policy, but this latest political and economic firestorm has affected the industry like no other. Regardless of what this winter drilling season brings, I know that the resilience and dedication of PSAC member companies will continue to rebuild and empower their employees as this quantum shift from deep gas to shale gas and heavy oil creates new opportunities for the future. Safety, climate change and the social licence to operate are important factors that have become the “new norm” as we move forward in the pursuit of hydrocarbons. PSAC member companies champion these causes as they work with producers, the public and government agencies in reducing the oil and gas industry’s impact on the environment. Brian Coston, PSAC Board Chair As the Chair of PSAC for 2010-2011, I feel it is paramount that we raise the profile of the services industry in the eyes of the public and the government, and continue to keep the discussion about the significance of the oilfield services sector top of mind. Many of you will be aware that PSAC recently undertook an extensive project and commissioned the Canadian Energy Research Institute (CERI) and Mission Capital Inc. to identify our industry’s contributions to Canada’s gross domestic product as well as the revenues we’ve generated, not only at home but through our extensive technological expertise employed elsewhere in the world. Our secondary and post-secondary institutions can and will use this information to direct curriculum that will provide qualified personnel for years to come. The results of the PSAC studies, revealing $65 billion of Canada’s GDP is generated by the oilfield services sector and $13 billion in revenues is generated abroad by Canadian-based oilfield service companies, indicate the sector is the single largest services industry contributor to GDP. Our 800,000 employees, or 4.8 per cent of the Canadian workforce, were negatively impacted two years ago by policy changes focused on exploration and production companies and their royalties, taxes and profits. Awareness and education will hopefully ensure that PSAC and the oilfield services sector are consulted prior to any significant changes in the future. E&P companies also recognize that the “Big Oil” label has made it difficult, if not impossible, for them to garner public support for ongoing projects without the support of the services sector. Working together, we can provide the direction, funding and technological advancements required to maintain our status as the best-run and most environmentally friendly oil industry in the world. I have a great group of board members representing a wide variety of large and small service companies all focused on championing the interests of our member companies in the pursuit of new and exciting opportunities in this wonderful industry we call the “patch.” I encourage all of my colleagues to get involved in committees and initiatives to make the most of their membership in the vibrant leading edge association we know as PSAC. Sincerely,

Brian Coston PSAC Board Chair

PETROLEUM SERVICES NEWS

Wellsite Supervision and Project Management

WINTER 2010 VOL 10 • No. 3 The Petroleum Services Association of Canada is the national trade association representing the service, supply and manufacturing sectors within the upstream petroleum industry. PSAC represents a diverse range of over 250 member companies, employing more than 52,000 people and contracting almost exclusively to oil and gas exploration and production companies. PSAC member companies represent over 80 per cent of the business volume generated in the petroleum services industry. PETROLEUM SERVICES ASSOCIATION OF CANADA 1150 800 6TH AVENUE SW CALGARY, AB T2P 3G3 TEL: 403 264 4195 FAX: 403 263 7174 SENIOR VICE PRESIDENT: ELIZABETH AQUIN EDITOR: HOLLY KERR

PETROLEUM SERVICES NEWS IS PUBLISHED FOR PSAC BY VENTURE PUBLISHING INC. 10259-105 STREET, EDMONTON, AB T5J 1E3 TEL: 780-990-0839 FAX: 780-425-4921 TOLL-FREE: 1-866-227-4276 CIRCULATION@VENTUREPUBLISHING.CA

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11/19/10 9:30:07 AM

PETROLEUM SERVICES NEWS

DRILLING FORECAST

On the Up and Up

9,000

FORECASTED NUMBER OF WELLS DRILLED FOR 2011

7,000

PSAC FORECASTS INCREASED OIL PATCH ACTIVITY FOR 2011

5,000

HE 2011 CANADIAN Drilling Activity Forecast, released

by the Petroleum Services Association of Canada (PSAC) on November 1, 2010, forecasted a total of 12,250 wells drilled (rig released) across Canada for 2011. This is more than the expected fi nal tally of 11,350 for 2010. “Drilling activity levels are increasing,” says Roger Soucy, outgoing President of PSAC. “This past year has been a turnaround year for the industry. We are anticipating a 35 per cent increase in wells drilled over 2009 to 11,350. Although still a long way from the almost 25,000 wells of 2005, it represents a new beginning on a number of fronts.” PSAC estimates that on a provincial basis for 2011, Alberta will see 7,915 wells drilled, and 700 will be drilled in British Columbia, representing an increase of five per cent in Alberta and an increase of one per cent in B.C. over expected 2010 drilling levels. Saskatchewan’s drilling rate in 2011 will see a 16 per cent increase to 3,050 wells. In Manitoba, drilling levels will increase 10 per cent to 550 wells. “Oil and gas activity is predicated on price,” continues Soucy. “In 2011, oil prices will be adequate to sustain oil activity. As a result, we are

3,000

1,000

Alberta 7,915 (+5%)

B.C. 700 (+1%)

Saskatchewan 3,050 (+16%)

Manitoba 550 (+10%)

forecasting increased drilling in oil areas like Saskatchewan and northeastern Alberta. Gas pricing, on the other hand, remains relatively low and we are not expecting any significant gas price turnaround in 2011. This, combined with industry’s focus on shale gas drilling, has led us to forecast an 11 per cent drop in the conventional shallow gas drilling area of southeast Alberta.” PSAC is basing its 2011 Drilling Activity Forecast on average natural gas prices of $4 per thousand cubic feet (AECO) and crude oil prices of US$80 per barrel (WTI).

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11/11/10 8:57:50 AM

IN THE FIELD

News, events and activities in the industry

Goodbye OnStream, Hello Petroleum Services News OUR QUARTERLY MAGAZINE, formerly known as OnStream, is the official voice of PSAC. It has evolved since its early days as a hand-typed newsletter to a tabloid-style printed newsletter to the full-fledged industry magazine most of you are probably familiar with today. This trade publication discusses issues of importance to PSAC’s members, to the wider oil and gas community and to government, with a mandate to increase awareness of salient industry issues and to lobby for policy changes that will benefit PSAC’s members. Having reached an exciting turning point with OnStream earlier this year, we have made some changes. PSAC is pleased to announce a new name, a new look and a new publisher for your member magazine. We know you’ll be impressed with this first issue of Petroleum Services News, bringing a strengthened focus on providing relevant, topical information about the petroleum services sector. The new name is intended to reinforce the importance of the oilfield services sector for the economic health of Canada. With 800,000 employees and $9 billion in taxes, the industry is vital to the country. Petroleum Services News will ensure that government officials, regulators, producers and the financial community understand this. In this inaugural issue of Petroleum Services News, we present the highlights of our recent study on the economic contributions of the oilfield services sector to the Canadian economy. In addition, you will still fi nd the information you want on trends, issues, business practices and technology. We will highlight the innovation of our members and keep you up to date on what your Association is doing for you. We are very excited about the changes in the magazine and look forward to your response. Venture Publishing Inc., the award-winning publisher of Alberta Venture and Alberta Oil, is our new partner on the magazine. If you are interested in learning more about advertising opportunities in Petroleum Services News, please contact an advertising account executive at Venture. In Calgary, contact Dennis McCormack at 403-228-4337 ext. 222 or dmccormack@albertaoilmagazine.com. In Edmonton, contact Leslie Hastman at 780-990-0839 ext. 246 or lhastman@albertaoilmagazine.com. You can also visit: www.advertisewithventure.com.

Results of Our Reader Survey WE ASKED, YOU ANSWERED and we listened! PSAC ran an OnStream reader survey over the summer months and received some terrific feedback. Overall, you told us that you look for stories covering industry issues, news and events and regulatory information; your main reason for reading the magazine is to better understand services sector issues; most of you pass the magazine on to others in your organization; and many of you would like to receive a digital version. All of this valuable information is helping us take the magazine, now Petroleum Services News, in new and exciting directions. Thank you for your thoughtful feedback. And congratulations to Brenda Arbeau, an OnStream reader in New Brunswick, whose name was drawn as the winner of an Apple iPod Touch in the “Help Us Rename OnStream” contest. We received many creative magazine name suggestions, and although the jury ultimately did not choose any of the submissions as the new name, PSAC thanks all entrants for their IPOD TOUCH WINNER: Brenda Arbeau’s daughter participation. Megan holding her new prized possession

PETROLEUM SERVICES NEWS

COMING EVENTS PSAC STARS & SPURS Gala January 22, 2011, BMO Centre, Stampede Park, Calgary, Alberta www.psac.ca/events PSAC Spring Conference April 12 & 13, 2011 Red Deer, Alberta www.psac.ca/events PSAC Mid-Year Luncheon and Drilling Activity Forecast April 2011, Calgary, Alberta www.psac.ca/events Petroleum Safety Conference May 4-6, 2011 Banff, Alberta www.enform.ca/events

NEW MEMBERS REGULAR MEMBERS Black Diamond Group Ltd. DNV Energy Canada E-MAC Corrosion Inc. North American Pipeline Inc. Triple T Oilfield Services

ASSOCIATE MEMBERS Ditch Hitch Integrated Risk Management Techworks Solutions Providers Inc.

For Roger’s a Jolly Good Fellow… ALL THE BEST to Roger Soucy as he retires after 29 years at the helm of PSAC. His retirement party was held on October 28 at the Sheraton Suites Eau Claire in Calgary. The event was attended by colleagues, co-workers and friends who toasted Roger and wished him well. A brief trip through photos of Roger’s legendary time at PSAC was enjoyed by all. For more photos of the festivities, visit www.psac.ca/events.

WWW.PSAC.CA

Message from New PSAC President FROM MECHANIC

to a masters degree in business administration to President and CEO of PSAC, that’s me in a nutshell and I can assure you MARK A. SALKELD that I am truly looking forward to the challenges and opportunities ahead. I came to the Canadian oil patch roughly 30 years ago and not long after, like many in our industry, I experienced firsthand the negative effects of the National Energy Policy, and the first of three or four setbacks for the Canadian oil and gas services sector that over the ensuing years I will dedicate all efforts in helping to avoid as much as possible for the PSAC membership. Roger Soucy is leaving a spectacular 29-year legacy and my legacy will be based primarily on his first words of advice to me as the incoming President and CEO: “We are here to serve the PSAC membership first and foremost.” I have taken these sage words to heart. In previous services sector slowdowns, I was fortunate enough to remain in the patch. However, it was through overseas contracts that I kept connected to an industry that I truly love and realized that the Canadian oil patch is second to none. I have worked off-shore Europe, western Siberia and Australia twice (west and east) and as interesting as it was to work in these other areas, I must admit that there’s no place like home. I look forward to working with Brian Coston, PSAC’s incoming Chair, and give thanks to David Yager, our outgoing Chair for the role he played in further instilling in me an excitement and enthusiasm to lead PSAC. Cheers, Mark A. Salkeld PSAC President

PSAC and KPMG Announce New Scholarship PSAC IS PLEASED

to announce that a new scholarship is being made available to students as part of the PSAC Education Fund. The PSAC Roger Soucy Legacy Scholarship Funded by KPMG will be available to students starting in 2011. KPMG is providing $2,500 per year over the next five years for this new scholarship. It was created to honour Roger Soucy, who has been President of PSAC since its founding in 1981 and who retired on November 1, 2010. Rhys Renouf, National Energy Services Leader at KPMG, says, “KPMG places a high value on education. We work with a large number of clients in the energy services sector and understand the important role that Roger has played over the past 29 years. We admire the work that Roger and PSAC’s members have contributed toward advancing education in western Canada over the past nine years through the Education Fund.” Renouf adds, “KPMG wanted to augment the goals of the Education Fund in our own way and acknowledge Roger’s dedication at the same time. And so the PSAC Roger Soucy Legacy Scholarship Funded by KPMG is a great way to

honour someone who has put in a lot of time and effort to support and grow an industry that is integral to Alberta and Canada.” Travis Strube, PSAC’s Education Fund Committee Chair, acknowledged KPMG’s contribution, stating, “Students and the petroleum industry will both benefit from KPMG’s generous support of the Education Fund.” PSAC’s Education Fund is dedicated to encourage learning and building the future workforce of the oil and gas industry. Enabling students to take advantage of educational opportunities is the central aim of the fund; it helps ensure that future generations will have the knowledge and tools to thrive, and is just one example of how the petroleum services industry supports Canadian communities in which it works. Since it was established in 2001, the Education Fund has invested over $140,000 in the future of Canadian students. Students pursuing a certificate, diploma or degree at an accredited post-secondary institution are eligible to apply for the annual scholarships, which are made available in January of each year.

FROM THE

Drilling

Forecast ACTIVITY

PSAC’S AGM, 2011 DRILLING ACTIVITY FORECAST AND INDUSTRY DINNER CONTINUE TO DRAW CROWDS

ACH YEAR, PSAC’S ANNUAL GENERAL MEETING, Drilling Activity Forecast and Industry Outlook Session present outstanding opportunities for networking and the gathering of valuable knowledge. This year began with a media conference where PSAC officially released its 2011 Canadian Drilling Activity Forecast. Following the media conference, this year’s AGM was well attended by PSAC members as the association bid farewell to Roger Soucy after 29 years of steady leadership in his role as President. Members then welcomed incoming President Mark Salkeld, who brings 30 years of industry experience to PSAC, including various roles overseas with Nabors Drilling.

STAND AND DELIVER Outgoing Chair David Yager presents his Year in Review

Member company representatives reviewed financial statements, elected new board members and heard about PSAC’s accomplishments over the past year from outgoing Chair for 2009-2010, David Yager. The incoming Chair for 2010-2011, Brian Coston, was introduced and welcomed. More than 70 individuals and companies were acknowledged for their enthusiastic commitment and participation in PSAC initiatives and were recognized with Distinguished Service Awards and Long-Standing Member Awards. 2011 CANADIAN DRILLING ACTIVITY FORECAST AND INDUSTRY OUTLOOK It was standing room only at PSAC’s 2011 Canadian Drilling Activity Forecast as more than 300 people crowded into the presentation hall to hear about the upcoming year and the expected activity levels from four industry experts: Roger Soucy; Dan Macdonald, Analyst, oilfield services, RBC Capital Markets; Chris Theal, President and CEO, Kootenay Capital Management Corp.; and Kerry Guy, Manager of Natural Gas Advocacy for the Canadian Association of Petroleum Producers. While there is no doubt the industry will continue to face challenges ahead, overall the news presented at this session was optimistic:

PETROLEUM SERVICES NEWS

DAF AND AGM INDUSTRY OUTLOOK A crowd of 300 await the perspectives of industry experts on drilling activity levels for 2011

“WITH PSAC’S HELP, A MORE WELL-INFORMED GOVERNMENT AND PUBLIC WILL PROVIDE THE PLATFORM REQUIRED FOR ALL OF US IN THE OIL AND GAS INDUSTRY TO GROW AND PROSPER IN THE WESTERN CANADIAN SEDIMENTARY BASIN.”

• Drilling activity levels are increasing. • The use of horizontal wells has been on the rise, with a record number of horizontal wells being drilled in every province, and this trend is expected to continue. • Land sale activity is strong. • Expect gas market rebalancing by mid-2011. All speakers agreed that while we will not soon see the record 25,000 wells we saw in 2005, the changes anticipated ahead represent a new beginning and optimism on many fronts.

– Brian Coston, 2010-2011 PSAC CHAIRMAN

SHAKE ON IT Outgoing President Roger Soucy welcomes incoming President Mark Salkeld

INDUSTRY DINNER PSAC hosted its annual industry dinner to a full house of about 300 guests. The keynote speaker was Robert Ineson, Senior Director with IHS Cambridge Energy Research Associates (CERA). Ineson is leader of CERA’s North American natural gas team, and presented “The Shale Gale and What it Means for the Canadian Gas

WWW.PSAC.CA

DAF AND AGM DS AWARD RECIPIENTS Heather Barratt Martin Blair Clyde Bonnell Jesse Clifford Todd den Engelsen Harold Drok Lee Emond Brian Farmer Fred Farmer Glen Gibling Tracee Gillman Doug Klaning Robert Knowles Murray Lambkin Garry Lane (ret.) Ron Logan

Champion Technologies Ltd. Weatherford Canada Partnership National Oilwell Varco Stream-Flo Industries Ltd. Canyon Technical Services Ltd. Flint Energy Services Ltd. Import Tool Corp. Ltd. Trojan Safety Service Halliburton Group Canada Halliburton Group Canada Prudential Energy Services Halliburton Group Canada Weatherford Canada Partnership Sanjel Corp. Strike Energy Services Inc. Strike Energy Services Inc.

Rachael Lusk Stacey Marr David McHattie

Sanjel Corp. Weatherford Canada Partnership Tenaris Global Services Inc.

Lucas Mezzano

DYNAenergetics Canada Inc.

Lorraine O’Donnell Dave Osborne Brian Paisley Gail Purdy Mark Ravlich Rob Ryan Stacy Saunders Warren Schick Greg Steffensen Travis Strube Renee Vanderwolf Wendy Watson Ross Whelan

Nabors Canada CEDA International Corp. Nabors Canada National Oilwell Varco Essential Energy Services Hallmark Tubulars Ltd. Kodiak Wireline Services Ltd. Sanjel Corp. Newalta Corporation Topco Oilsite Products Ltd. National Oilwell Varco Trican Well Service Ltd. High Arctic Energy Services

Industry,” with reference to opportunities in the Western Canadian Sedimentary Basin. The annual dinner event was an opportunity for many to wish Roger Soucy all the best as he retires from PSAC and moves on to new endeavours. Brian Coston spoke about his intentions to help raise awareness of opportunities for young people in the oilfield services sector through PSAC’s Education Fund. “Given the information uncovered this year by PSAC and the Canadian Energy Research Institute about the economic contribution of the oilfield services sector to the Canadian economy – that it is a $65billion industry employing some 800,000 people – I intend to lobby the secondary and post-secondary institutions to raise the awareness of the limitless opportunities our industry can provide to young people that will hopefully interest them in becoming involved in what we know as

PSAC THANKS OUR SPONSORS FOR THEIR GENEROUS AND ENTHUSIASTIC SUPPORT OF OUR EVENTS:

CANADIAN DRILLING ACTIVITY FORECAST SESSION SPONSOR:

MEDIA SPONSOR:

INDUSTRY DINNER CO-SPONSORS:

the best industry in the world.” He adds, “With PSAC’s help, a more wellinformed government and public will provide the platform required for all of us in the oil and gas industry to grow and prosper in the Western Canadian Sedimentary Basin.” Coston also indicated the Association will continue to work on strengthening relationships between the producing sector, the services sector and the public through PSAC’s Public Outreach Program. He pointed out that, as always, PSAC will continue to focus on members’ most pressing concerns, which are labour, safety, technology and the bottom line.

PSAC LONG STANDING MEMBERS 2011 25-YEAR ANNIVERSARY B.W. Rig Repair & Supply Sanjel Corp. 15-YEAR ANNIVERSARY Arresting You Ltd. Bri-Chem Supply Ltd. Brine-Add Fluids Ltd. Fire Power Oilfield Fire Fighting Ltd. Formula Powell LP Phoenix Technology Services LP 10-YEAR ANNIVERSARY Canadian Special Service Ltd. Principle Services Inc. Snubco Pressure Control Ltd. Precision Drilling Corp. Wesco Testing and Wireline Inc.

F I Oilfield Services Canada Columbia Oilfield Supply - A Division of Precision Drilling Corp. LRG Catering - A Division of Precision Drilling Corp. Newalta Corp. Rostel Industries - A Division of Precision Drilling Corp. Shallow Well Enterprises Ltd. Windward Resources Ltd. Wood Group ESP (Canada) Ltd. Abandonrite, a Service By Nabors Production Services GTO (2002) Ltd. 5-YEAR ANNIVERSARY Raybo Well Control Ltd. Team Snubbing Services Inc.

Piston Well Services Inc. Powerstroke Well Control Ltd. Canyon Technical Services Ltd. Kos Oilfield Transportation Northern Snubbing Inc. Smithbrook Mud Services Ltd. Summit Wireline Inc. Tyco Valves & Controls Canada Inc. Strata Energy Services Inc. Central Alberta Well Services Corp. Iron Horse Energy Services Leader Energy Services Ltd. Strike Energy Services Inc. Stinger Wellhead Protection (Canada) Inc. Tarpon Energy Services Ltd.

PETROLEUM SERVICES NEWS

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PETROLEUM SERVICES NEWS

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DAVID YAGER PSAC CHAIR, 2009-10

SECTOR

Big Business

PSAC MEMBERS KNEW IT – NOW THE REST OF CANADA KNOWS Wellbore OF THE WHOPPING ECONOMIC CONTRIBUTIONS MADE BY THE UPSTREAM OIL AND GAS SERVICES SECTOR

HE NUMBERS ARE IMPRESSIVE: A $65-billion business, 800,000 employees, $9 billion in annual taxes. Even better, the Canadian oil and gas service, supply and manufacturing sector can be proud to call these numbers its own. That’s right. A comprehensive study commissioned by PSAC has quantified what many in the sector knew in their gut – the oil and gas services sector is big business. If we already knew it, why did we need the study? David Yager, the 2009-2010 PSAC Chairman, and Chairman and CEO of HSE Integrated Ltd., explains, “The energy policy debate about the role of the oil and gas industry in Canada is primarily focused on exploration and production companies, including the royalties and taxes they pay and the profits they reap. While many people understand the essential role the services sector plays in supporting oil and gas development, most do not realize the degree to which this sector drives jobs, investment and economic opportunity.” WWW.PSAC.CA

And when governments and the public don’t understand the services sector’s economic contributions, they can easily make decisions that are detrimental to everyone working in and with the sector – and the industry as a whole. (Case in point: the Alberta Royalty Review of 2007.) So PSAC commissioned the Canadian Energy Research Institute (CERI) and Mission Capital Inc. to conduct the study and produce the resulting report, “The Contributions of the Canadian Oil and Gas Services Sector to the Canadian National Economy.” The study’s services sector data incorporates all of the products and services used in direct support of exploration and production (E&P) activities, including exploration, drilling, completion, production, construction, processing, transportation, logistics, manufacturing, maintenance and fabrication. In October 2010, PSAC proudly released the results of the surprising study. Here’s a snapshot of the impressive statistics that were uncovered.

SERVICES SECTOR CONTRIBUTION TO GDP In 2006 (the latest year of available data), the oil and gas services sector contributed a whopping $65 billion to Canada’s gross domestic product (GDP). That’s 4.8 per cent of Canada’s total GDP. Compare the service sector’s $65 billion to the 2006 GDP of some other sectors: • Oil and gas production: $86.6 billion • Residential construction: $30.8 billion • Automobile manufacturing: $17.6 billion • Non-residential construction: $15.2 billion • Agriculture: $9.0 billion • Forestry: $6.5 billion Out of Canada’s biggest industrial and resource sectors, only the producers contribute more to Canada’s GDP than the oil and gas services sector. SERVICES SECTOR CONTRIBUTION TO TAXES That same year, the oil and gas services sector paid $9 billion in personal and corporate taxes to federal and provincial governments. That’s 4.1 per cent of all taxes paid that year. SERVICES SECTOR CONTRIBUTION TO EMPLOYMENT In 2006, the Canadian economy employed 16.5 million workers in total. The oil and gas services sector employed 800,000 workers, or 4.8 per cent of Canada’s total labour force. These numbers are huge, but what’s even more impressive is that more than half of the sector’s GDP contribution (52 per cent) and the sector’s employment (54 per cent) comes from activities and industries located throughout the country. That means that the sector’s benefits stretch further than western Canada. Now, let’s look at how this kind of data may have affected the outcome of the Alberta Royalty Review. At the time, PSAC representatives were invited into the conversation, but the panel’s primary focus was producer proﬁtability, oil prices and the impact on consumers. At that time, PSAC did not have the oil and gas services sector numbers to broaden the debate. “If we had walked in and said, ‘We’re a $65-billion-a-year industry with 800,000 workers paying $9 billion a year in taxes – and your decisions will affect all of this immensely,’ it would have made a huge difference,” says Yager, a self-described “data guy” who chose to spearhead the data project when he became PSAC Chair in 2009. Because Statistics Canada is the primary source for the report’s data, the report is a “snapshot” of the sector in 2006, the last census year. As we all recall, the oil and gas industry was experiencing its biggest boom ever that year – quite a different scenario from today. “The odds are pretty good that it’s shrunk since then,” agrees Yager, “but our sector’s contribution to the overall economy remains substantive.” Nisku Industrial Park, one of the largest industrial business parks in western Canada, is a compelling example of the services sector’s economic clout. Nisku is home to 400 businesses and 6,000 employees, over 70 per cent of them in the oilfield services sector. “We attract attention from around the world,” says Pat Klak, Executive Director of the Leduc/Nisku Economic Development Region, home of the Nisku Industrial Park. “China, the U.S., Europe – we’ve had interest from those countries and many more because they know how much value our

PETROLEUM SERVICES NEWS

innovative oilfield services companies bring to Canada. With the release of the PSAC report, now the rest of Canada will see how important the industry is as well.” The report makes it clear to policy makers that another major component of the oil and gas business – beyond producers – needs to be factored into decisions. To ensure decision makers are aware of the data, PSAC executives have been actively delivering copies of the report directly to elected officials, ever since it was released. Ron Liepert, Alberta Energy Minister, Thomas Lukaszuk, Alberta Employment and Immigration Minister, and Christian Paradis, federal Natural Resources Minister, all received the report from Elizabeth Aquin, PSAC’s Senior Vice President, at events in Calgary this fall. “Delivering the report in person allows us to convey key messages from this groundbreaking study and urge elected officials to read the report in full,” explains Aquin. – David Yager, 2009-2010 PSAC CHAIRMAN PSAC hopes government officials and policy

PUBLIC ADDRESS CERI Interim President Peter Howard shares the results of the PSAC report

“FOR YEARS WE’VE BEEN TRYING HARD TO CONVINCE THE PEOPLE TO GIVE US A SEAT AT THE TABLE OR INCLUDE US IN THE ENERGY POLICY DEBATE. WITH THIS COMPELLING DEMONSTRATION OF ECONOMIC IMPACT, THE SERVICES SECTOR SHOULD NOW EXPECT A GREATER ROLE IN ANY DISCUSSIONS THAT IMPACT THE WELL-BEING OF THE ENERGY INDUSTRY.”

makers will take the time to review the report and understand its key message: the services sector is big enough to deserve a separate voice from the E&P sector. Clearly, that’s already happened in Alberta. On behalf of Minister Liepert, Tim Markle, Public Affairs Officer for the Alberta Ministry of Energy, affirms, “The xoil and gas services sector industry is very important to Alberta. This document clearly shows how valuable it is.” That’s exactly the kind of response PSAC is looking for. PSAC knows its lobbying efforts on behalf of its member companies will be much more effective when governments and the public know about and value the full economic contributions of the services sector. Yager is also hoping that the report helps the sector gain a new profile with the business community at large. Yager says that certain jobs are “enshrined” in Canada’s culture, like the farmers, fishers, automotive assembly workers, foresters and miners. But to his dismay, oilfield services jobs don’t seem to have the same recognition. “When people talk about the oil industry, all they talk about is big profits. There doesn’t seem to be any cultural identification of this enormous group of workers that does something valuable.” Greater recognition of the important role played by the sector’s employees will help companies recruit and retain the skilled workers they need now and into the future. “We need to be proud of what we’ve got,” states CERI’s Peter Howard, the report’s author. Howard hopes the report will help Canadians realize that “this is homegrown Canadian technology, people and resources, developed over the last 50 years.” Nisku Industrial Park’s Pat Klak agrees there’s plenty to be proud of. “We live it every day, as we watch the sector continue to deliver in good times and bad. Thousands of people work in the industry because it’s good, important work. They’re proud of what they do and they are a big piece of Alberta’s prosperity.” No question, this is a sector to be reckoned with – one that clearly holds its own among Canada’s heavy hitter industries. What’s more,

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when the economic downturn hit in 2008, the services sector – unlike some other sectors – didn’t demand a bailout. “What this industry does is motor along, in economic ups and downs and despite governments’ attempts to destroy it periodically with primitive tax and royalty policies,” says Yager. Mark Salkeld, PSAC President, is immensely proud of the sector and its accomplishments. “I’ve worked in the oil and gas services sector my entire career. If I had the chance to do it over, I wouldn’t change a thing. The people in this sector are resilient, hard-working, smart and innovative. It’s no surprise to me that the sector’s employees and entrepreneurs have

PARTNER REPORT ADDS UP SECTOR’S EXPORT CAPACITY A second report commissioned by PSAC focused on the sector’s export capacity. PSAC wanted to understand the sector’s export capacity because over the last six decades, Canadian advances in research and development, technology and equipment have strengthened the oil and gas industry from one that primarily imports its products to one that is exporting to international markets. Alberta’s government has long since pushed the idea of industrial diversiﬁcation, and David Yager, 2009-2010 PSAC Chairman, believes that it has been achieved thanks to the efforts of the services sector. For this report, called “PSAC Oil and Gas Support Companies International Revenue Review,” Mission Capital Inc. sought out information from the larger services companies that are required to disclose their international revenues. Data was tallied from the companies’ 2008 and 2009 annual reports. The report states that in 2009, 36 Canadian drilling and well servicing, service and supply, and pipeline infrastructure and processing companies earned $12.8 billion in revenue outside of Canada. The international revenue of those companies made up one-third (34 per cent) of their total revenue. Interestingly, there was a 15 per cent drop in revenue from 2008 to 2009, but only a nine per cent drop in international revenue over the same period. That shows the agility of the sector and its people to move to areas of highest activity as required. Overall, the report’s data proves that Canadian oil and gas services sector people and technology are definitely exportable. “We’re not just waiting around for oil companies to decide they want to drill here,” says Yager. “We can go out and work for other people in the world – and we do.”

been able to build a business that puts it in the league with Canada’s other resource industry superpowers.” PSAC is very pleased that its new report confirms what PSAC members already knew: the services sector really does matter. Responsible for approximately five per cent of all GDP and employment, and four per cent of all taxes, the sector makes significant economic contributions every year – significant enough to be considered when policies are being set and opinions are being formed. PSAC hopes that with this data, the oil and gas services sector will finally receive the attention it deserves. PSAC’s reports are available on the PSAC website at www.psac.ca.

PETROLEUM SERVICES NEWS

ADVERTISING FEATURE

Are you TRULY protected?

HERE IS MUCH CONFUSION IN THE OIL AND GAS INDUSTRY ABOUT THE

true certification of the Protective Clothing worn by workers. Almost all coveralls, shirts, pants and jackets sold to hydrocarbon workers will have labels sewn in the clothing stating that “This garment meets the performance requirements of CGSB 155.20-2000 Workwear for Protection against Hydrocarbon Flash Fire”. Do these garments actually meet this standard or don’t they? That is the critical question! Certification provides the assurance that all the components including fabrics, thread and fastening systems have been tested by accredited labs and have met the criteria for protection against FlashFire as set out in CGSB155.20. Only components that have had the lab test reports verified by CGSB on an annual basis can be deemed to be LISTED as certified. This program extends to the Certification of Finished Garments. Only finished garments that have been examined by CGSB and found to meet the criteria can bear the CGSB logo on the label. In order to verify compliance CGSB performs an annual audit of manufacturers that have actually submitted garments for verification of compliance. MWG Apparel Corp of Winnipeg is the ONLY manufacturer of Flame Resistant clothing that is entitled to display the CGSB Certified label in our clothing. If at any time it is found that the components or the finished garments do not pass subsequent testing, CGSB can and will pull the certification. There are similar certification programs for hard hats, work boots and other safety products that the majority of

manufacturers of these products certify their products. At present MWG Apparel is the only certified manufacturer of GARMENTS for Protection from FlashFire. For additional information please see the CGSB website at: http://www.tpsgc-pwgsc.gc.ca/cgsb/prgsrv/certprg/ program/c155_020-2000_index-e.html In comparison, other garment manufacturers state that their clothing “Meet the performance requirements of CGSB155.20” There has been no verification of this claim and the only person declaring that the garment meets the standard is the person sewing the label into the garment, with NO third party verification. These other garment manufacturers merely rely on the fact that fabric mills test their fabric in accordance with CGSB criteria and then leave you the purchaser and wearer of protective clothing to decide if the garment meets the standard or not.

DO YOU HAVE THE KNOWLEDGE TO MAKE THIS DECISION? Bill C-45 states that “Every one who undertakes, or has the authority, to direct how another person does work or performs a task is under a legal duty to take reasonable steps to prevent bodily harm to that person, or any other person, arising from that work or task.” As a responsible employer by supplying your workers with CERTIFIED garments you will have demonstrated due diligence in the unfortunate event of your workers being exposed to a FlashFire incident.

Look for this Logo. If the garment does not display this symbol, then it is NOT fully certified.

For more information about CGSB certification and how to protect yourself and your fellow workers, please contact:

info@mwgapparel.com or call (204) 786-0246

MWGAPPAREL

CORP.

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Head

Class

OF THE

PSAC EDUCATION FUND ANNOUNCES SCHOLARSHIP AND GRANT WINNERS

HE PSAC EDUCATION FUND awarded 10 students and 10 schools $1,000 each for a total of $20,000 in scholarships and grants this year. PSAC is pleased that these annual awards will enable student recipients to pursue their educational goals and help small schools in western Canadian communities enhance their learning programs. Since being established in 2001, the Fund has invested over $140,000 in the futures of Canadian students. Students pursuing a certificate, diploma or degree at an accredited post-secondary institution are eligible to apply for the scholarships. Proposals for grant funding are submitted by schools aiming to enhance their learning opportunities in math, sciences or trades programs. The goal of the program is to build awareness of and interest in careers in the petroleum services industry. By offering financial support through the PSAC Education Fund, the petroleum services industry helps to develop and support future leaders in a tangible way. PSAC and its member companies are committed to encouraging learning and building the future workforce. Enabling students to take advantage of existing opportunities and helping

schools to create new ones is the central aim of the PSAC Education Fund. The Fund helps ensure that the upcoming generation will have the knowledge and tools to thrive, and is just one example of how the petroleum services industry supports the Canadian communities in which it works. Scholarship recipients were determined this year through a random draw process while grant recipients were selected by a committee according to a predetermined set of criteria. More information can be found starting in January at www.psac.ca/community. SCHOLARSHIPS A total of 539 eligible applications were received for PSAC scholarships in 2010. Applications covered a variety of fields, including engineering, medicine, technology, business, education, trades and much more. This year’s recipients of $1,000 scholarships were:

MEMBER COMPANY SCHOLARSHIP RECIPIENTS STUDENT NAME Yulia Abramovich Stefano Arcovio Angela Misuraca Reto Mueller Adam Thomson

COMPANY AFFILIATION Enerﬂex Ltd. Calfrac Well Services Ltd. Sanjel Corporation Master Flo Valve Inc. Weatherford Canada Partnership

SCHOOL University of Calgary Queen’s University University of Calgary University of Alberta University of Alberta

AREA OF STUDY Psychology Engineering Communications Engineering Engineering

PETROLEUM SERVICES NEWS

PUBLIC SCHOLARSHIP RECIPIENTS STUDENT NAME Andrea Buchﬁnk Chloe Curtis Stephanie Eely Steven Hackman Colleen Wilson

SCHOOL University of Alberta Northwest Community College Langara College University of Alberta Queen’s University

AREA OF STUDY Engineering Nursing Nursing Engineering Engineering

PUBLIC SCHOLARSHIP RECIPIENTS SCHOOL GRANTS A total of 39 eligible applications were received for school grants in 2010. All of the schools are located in communities with populations of 30,000 or less and have limited resources available for science, math and trades programs. The 10 schools that received PSAC Education Fund grants of $1,000 this year were: SCHOOL PROJECT TOWN/PROVINCE Atikameg School Purchase of educational rockets and launch pads Atikameg, AB Beiseker Community School Purchase of TIG welder Beiseker, AB Eagle Butte High School Purchase of Vernier probeware Dunmore, AB Forestburg School Purchase of lab equipment, chemicals and model kits Forestburg, AB Holy Spirit Catholic School Purchase of robotics equipment Devon, AB Jessie Duncan Elementary School Undertake job shadow/oil & gas job bank project Penhold, AB Rimbey Junior/Senior High School Purchase of double reel cable holder for welder Rimbey, AB Saanich Adult Education Centre Sponsored science fair Brentwood Bay, BC SPIDER Distributed Learning Sponsored ﬁeld trip to Port of Vancouver petroleum facilities Gibsons, BC Success School Purchase of measurement sensors and galvanometer Success, SK

Leaders in Safety and Training for the Oil and Gas Industry Enform is the safety association for Canada’s upstream oil and gas industry. Established by industry for industry, Enform helps companies achieve their safety goals by promoting shared safety practices and by providing: » E ffective training, including courses on general and operational safety programs and petroleum fundamentals » Expert audit services » Professional advice Our vision is no work-related incidents or injuries in the Canadian upstream oil and gas industry. Contact Enform today for more information.

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Psac

Out

REACHES

PSAC REACHES OUT ON BEHALF OF THE SERVICES SECTOR IN ITS PUBLIC OUTREACH PROGRAM. HERE ARE THE LATEST DEVELOPMENTS

UR PUBLIC OUTREACH

Program has gained significant momentum since we last provided an update in the summer issue of OnStream. In June, we began distributing PatchWorks, our series of monthly articles that provide information, facts and statistics to industry employees and the public. Since June, we have provided articles on gasoline and crude oil pricing, a two-part explanation of how the royalty process works and an issue devoted to the economic contributions of the oil and gas services sector to the Canadian economy. Feedback suggests that the articles are well-read and passed along to many others. PSAC’s public website, which is located at www.oilandgasinfo.ca, is t he home for PatchWorks, along w ith additional information about the oil and gas industry. PatchWorks can be found at www.oilandgasinfo.ca/patchworks.

COMMUNITY PARTNERS PSAC has successfully gained the commitment of all the major oil and gas industry associations to an industry-wide, “in-the-field” courtesy program called Community Partners. The program was launched at a media event on October 22 in Calgary with attendance by media representatives and companies from various sectors publicly signing on to the program. Plans to publicly launch the program in British Columbia and Saskatchewan are underway. The program focuses worker attention on local concerns related to oil and gas activity – dust, gates, garbage, noise, driving safety and traffic. It also reminds oil and gas workers and contractors to communicate openly with area residents, and treat them and theirproperty with respect. A collection of tools that will help remind employees and contractors about respectful behaviour has also been produced. A one-minute catchy jingle can be found on www.communitypartners.ca and also on YouTube. Collateral items including vehicle air fresheners, windshield decals, tailgate magnets and hard hat stickers are also available for companies to order and distribute to their employees. Although the Community Partners program was only developed in the latter half of 2010, a growing number of companies from various sectors have already agreed to its guiding principles. These leading companies are recognized on the program’s website at www.communitypartners.ca.

PETROLEUM SERVICES NEWS

PSAC IN ACTION

Keeping the services sector front and centre

Lights, Camera, Action BRINGING YOU THE LATEST DEVELOPMENTS ON PSAC ACTIVITIES ON BEHALF OF ITS MEMBERS AND THE SERVICES SECTOR

INCE THE LAST ISSUE

of OnStream and the transition into the new Petroleum Services News, PSAC has remained active on behalf of the services sector. PSAC in Action rounds up the latest happenings, from the Education Fund Golf Classic to the presentation Wildrose Party leader Danielle Smith gave to the Board of Directors in June. We’ve been working with CAPP, addressing privacy concerns and getting members ready for the pre-drilling season. Here’s what we’ve been up to. STRATEGIZING FOR FUTURE GROWTH:

REGULATORY ENHANCEMENT PROJECT (REP) PSAC has been working closely with the Canadian Association of Petroleum Producers (CAPP) on the Regulatory Enhancement Project (REP), an important initiative by the Government of Alberta to further address the competitiveness of Alberta’s oil and gas industry. The REP came out of the royalty review process whereby the provincial government made a commitment to renew the policy and regulatory oversight system to ensure Alberta remains competitive globally. Industry has made recommendations to increase competitiveness and help the government make strategic changes to optimize Alberta’s regulatory system. These changes include developing a highly integrated single regulatory delivery structure, which would create a single window approach for development approval of projects. The next step in the process is to address particular industry issues. PSAC MEETS WITH CALGARY CAUCUS AND ALBERTA CABINET As part of an industry-wide delegation, PSAC met with the Calgary Caucus in April and the Alberta Cabinet in May to update government representatives about the status of the industry, including the major trends, land sales, rig counts, jobs, seismic activity, royalties and fiscal regime. The group also discussed the status of the Regulatory Enhancement Project and the Alberta is Energy initiative, a joint industry campaign designed to improve public opinion about the oil and gas industry. WILDROSE PARTY LEADER DANIELLE SMITH PRESENTS TO THE PSAC BOARD OF DIRECTORS In June, PSAC’s Board of Directors heard from Danielle Smith, leader of the Wildrose Alliance Party, who spoke about the Party’s understanding of the challenges to the industry, including the reputation of the oil sands, the potential impacts of the Land Use Framework (Bill 36), the timing of regulatory approvals and the development of a natural gas strategy.

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Gord McCormack from Hyduke Energy Services Inc. presents at the Investment Symposium in June

PETROLEUM SERVICES INVESTMENT SYMPOSIUM In June, PSAC hosted its 17th annual Petroleum Services Investment Symposium in Calgary. A key message delivered at the symposium was that while the Western Canadian Sedimentary Basin activity is recovering this year thanks to higher oil prices and technologies opening up new plays, there is still a surplus of equipment built during the boom years, with the exception of fracturing units, which are seeing very strong demand and rapid expansion. Senior officials from 28 publicly traded PSAC member companies presented their growth strategies to key members of the North American financial community, including buyside analysts, institutional investors, diversified fund managers, portfolio managers and petroleum services industry sellside analysts. The two-day event was well supported by sponsors and industry moderators, and was opened up to private investors on day two of the Symposium. PRE-DRILLING SEASON MEETING Approximately 65 member company representatives attended PSAC’s 11th annual Pre-Drilling Season Meeting in Fort St. John, B.C., on September 15, 2010. Presentations were made by WorkSafeBC, the local detachment of the RCMP, Commercial Vehicle Safety and Enforcement (CVSE) and the BC Safety Authority, and included data revealing that the oil and gas services sector enjoys some of the lowest disabling injury and fatality rates in the province, but on the flip side, the sector has one of the highest short-term disability rates amongst all industries operating in B.C., posing a significant cost to the industry. The RCMP emphasized the need for employers to monitor transportation issues such as high speed, seatbelt usage, alcohol consumption and the proper use of winter tires and their collective relation to frequency and

TWO COUPLES, ONE GOAL: INSPIRING OTHERS.

SAIT Polytechnic thanks Connie and Murray Cobbe and Barbara and David Johnson for their leadership and generosity. Both couples have donated $5 million each to education, through the Promising Futures™ Campaign in support of SAIT’s Trades and Technology Complex. In recognition of their gifts, the new home of the MacPhail School of Energy will be named the Johnson – Cobbe Energy Centre. Both Mr. Cobbe and Mr. Johnson are graduates of SAIT’s Petroleum Engineering Technology Program, and their combined contribution of $10 million will help create a centre of inspiration and transform the lives of many future students. SAIT’s new Trades and Technology Complex will engage up to 8,100 more full and part-time students each year in hands-on, career-oriented training. It will also turn Calgary into a hub of learning and contribute signiﬁcantly to our economy — thanks to the generosity of the Johnsons and Cobbes.

sait-promising-futures.ca

PSAC IN ACTION: Keeping the services sector front and centre

GROUNDBREAKING STUDY: Education Fund Golf Classic

severity of motor vehicle accidents. One of the CVSE’s areas of concern is the high number of mechanical deficiencies found on routine inspections of commercial vehicles. CVSE is initiating a pilot project giving officers the authority to remove and withhold a licence plate until the vehicle has been deemed roadworthy. PSAC’S 2010 EDUCATION FUND GOLF CLASSIC RAISED $46,000 FOR EDUCATION A crowd of 144 oilpatch employees and guests took to the fairways on July 22 in Calgary for a day of fundraising and fun, generating $46,000 for education at the annual PSAC Education Fund Golf Classic. The event, which took place at the Calgary Elks Lodge and Golf Club, boasted a number of highlights including a special presentation to guests of honour Stefano Arcovio, an engineering student at Queen’s University, and Angela Misuraca, a communications student at the University of Calgary. As a result of the tournament proceeds, each student was awarded a $1,000 scholarship towards their postsecondary studies. Arcovio and Misuraca are two of 10 students awarded the scholarships through member companies as part of PSAC’s 2010 Education Fund. Both students plan to work in the oil and gas industry upon completion of their studies. The fund also awarded $1,000 grants to 10 schools in small western Canadian communities this year to enhance their math, science and technology programs. The mandate of the PSAC Education Fund is to create awareness of career opportunities in the petroleum industry and help to develop the future workforce. (More detail in article on p.20) PRIVACY CONCERNS ADDRESSED In response to concerns raised by our members, PSAC has lodged a complaint with the Alberta Information and Privacy Commissioner relating to data being collected by ISNetworld on behalf of oil and gas companies. The complaint relates to the collection, use and disclosure of both contractor company fi nancial information and employees’ personal information; safeguarding of personal information; potential for the wider dissemination of personal information provided by Canadians

WWW.PSAC.CA

David Yager, PSAC Chair and Peter Howard of CERI present the findings of the impact of oilfield services on the Canadian economy at a press conference

under the U.S. Patriot Act; and protection regarding access to personal information collected by ISNetworld. The Privacy Commissioner is currently conducting an investigation of the PSAC complaint, and PSAC will advise members regarding progress on this issue. MEMBER LUNCHEON PSAC hosted 55 member company representatives at a member luncheon in Fort St. John, B.C., following its 11th annual Pre-Drilling Season Meeting. PSAC provided an update on the Association’s activities and member services. ALBERTA IS ENERGY PRESENTATION IN LLOYDMINSTER As part of PSAC’s commitment to partner with the other trade associations to ensure the industry is unified in countering negative press, PSAC and CAPP made a presentation to an audience of 70 members of the Chamber of Commerce in Lloydminster, Alberta, in August. They presented the Alberta is Energy message, part of a joint industry campaign designed to improve public opinion about the oil and gas industry. More information on the campaign can be found at www.albertaisenergy.ca. PSAC ANNOUNCES THE RESULTS OF TWO GROUNDBREAKING STUDIES ON THE ECONOMIC IMPACT OF OIL AND GAS SERVICES On October 5, PSAC announced to a sold-out crowd at Calgary’s Westin Hotel the results of two studies into the economic impact of oil and gas services on the Canadian economy. PSAC commissioned the Canadian Energy Research Institute (CERI) and Mission Capital Inc. to undertake these studies to create a better understanding among governments, the public and the media of the significant fi nancial and employment role this industry plays across Canada. The results indicate that in 2006 the oil and gas services sector contributed $ 65 billion to Canada’s gross domestic product, employed 800,000 workers across Canada and contributed $9 billion in personal and corporate taxes to federal and provincial governments. More information about the project can be found on p.15 or at www.psac.ca.

BUSINESS matters

Ramping Up Recruitment how should emPloyers aPProach hiring efforts following recent layoffs? by CaIlyNN KlINgBEIl

s the uncertainty and volatility

associated with last year’s financial crisis continues to fade, many petroleum services companies are experiencing signs of post-recession recovery and increasing staff accordingly. But with large numbers of layoffs still very much in recent memory, staff recruitment is an area teeming with challenges. We talked to two industry sources about recruitment issues and found that alongside the challenges, many new opportunities also exist. “Broadly speaking, it’s a mixed bag,” says Cheryl Knight, Executive Director and CEO of the Petroleum Human Resources Council of Canada, describing the hiring climate in the coming year. While gas prices are still relatively flat, a fact that will likely continue to affect the activity in the services sector, Knight notes hiring is happening in specific areas. Unconventional gas opportunities in British Columbia and Alberta using new equipment and technology are creating a demand for employees with a specialized skill set. The more buoyant price of oil is making business very busy in Saskatchewan and in the oil sands, where in situ development will increasingly involve the services sector. Overall, Knight says employment is ramping up, though not yet reaching the levels seen in 2006 through to 2008. “It’s going [to be] more gradual,” she says of the hiring climate. Increasing a workforce right now opens up myriad challenges, some brand new and others that companies have likely seen before. Knight notes that despite the remote locations or seasonal work of many services companies, many are getting better at diversifying the geographic areas they do business in to provide more stable work to their employees. An increasing problem surrounding training employees also exists, as many skilled people were lost during the recession. “Green hands create challenges,” says Knight, adding it can be costly for companies, especially smaller companies, to train new employees in very specialized skill sets.

Kelly Burake, Logistics Manager at DMK Drilling Fluids Ltd., has witnessed hiring challenges firsthand in recent months. While DMK’s Grande Prairiebased operations are back up to nearly 40 employees, the company was down to about 25 employees following layoffs in the spring of 2009. Restructuring the drilling fluid service and supply business has produced positive results and accompanying growth, but the recent recession is still very much on everyone’s mind. Job security is more of a factor than it was in the past, says Burake. “When we were in the peak of a boom cycle, people were mostly interested in money. Now they’re also interested in job security.” Burake and DMK also have to contend with concerns that business is ramping up too quickly. “It’s something management stays on top of. [We are] trying to prevent anything negative happening in terms of growth,” says Burake. So what can a company looking to hire do in these challenging times? “Right now we are in an environment where there are available supply sources from other sectors,” says Knight. Looking at construction, forestry and other sectors that are still in decline can create opportunities for hiring new staff that possess transferable skills. Burake has seen results recruiting staff for DMK using referrals, rather than the company’s previous strategy of actively recruiting. DMK aims to recruit local people with an industry background, utilizing referrals from organizations DMK works with and other sources. Knight also warns of retirements that will hit the industry hard from 2013 onwards. She advises companies to broaden and diversify their recruiting strategies now, looking not just at youth but other sources of supply. Along with skilled workers from other sectors that have transferable skills, Knight suggests tapping into the pool of skilled immigrants already in Canada. “When you lose retirees, you’re losing very seasoned people, so to simply focus on hiring young people means you’re going to have productivity and safety issues. We need to focus on skilled sources of supply.”

Petroleum services news

SOLUTIONS FOR EMPLOYERS RAMPING UP RECRUITMENT Justify your hiring actions Current employees who survived the layoffs may be extra sensitive to new hires. Employers need to be aware of current employee concerns that business is ramping up too quickly and new hires are not justified. Kelly Burake of DMK Drilling says that by fostering a strong organizational culture and keeping current employees in full understanding of hiring practices, new people are openly welcomed and accepted into the organization.

Shift your recruiting strategies Recruitment strategies that worked before the recession may not show the same results today. While DMK relied on active recruiting in previous years, the company has shifted its strategies and is experiencing success recruiting through referrals. DMK has also reacted to shifting employee values. While money and pay was a defining factor in the past, Burake says employees now seem to value job security above other benefits.

Tap into new markets When looking for additional sources of labour, Cheryl Knight of the Petroleum Human Resources Council of Canada suggests tapping into downsized workers from other industries that are accustomed to similar

work, environments and possess transferable skills. The pool of skilled immigrants already in Canada is another strong source of workers.

Profile yourself Companies should remember to profile themselves not only to their customers but also to future employees, says Knight. By having a website where potential employees can see what programs and benefits the company offers, the company can successfully profile itself as an employer of choice.

Promote the positives The seasonal nature of many services companies’ work and their operations in remote locations continues to create attraction issues for companies in the sector. According to a report by the Petroleum Human Resources Council of Canada, there is a real need and opportunity to promote the positives associated with a career in the sector. Employers can highlight the opportunity to work with high-tech equipment and cutting-edge science, the variety of work arrangements, solid compensation and benefits available, and the career opportunities within the sector, across the whole upstream industry and internationally.

A UNIQUE OPPORTUNITY TO REACH BUSINESS LEADERS IN THE OIL AND GAS SERVICES SECTOR Venture Publishing is pleased to announce that we have been selected by the Petroleum Services Association of Canada to relaunch OnStream magazine as Petroleum Services News. To learn how your advertisement in Petroleum Services News can reach a highly targetted audience of business leaders within the oil and gas services sector, contact: Venture Publishing Edmonton: 780 990 0839 ext. 231 Calgary: 403 228 4377 ext. 221 Email: sales@venturepublishing.ca

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MEMBER PROFILE

The New Standard EDMONTON COMPANY’S INNOVATIVE SYSTEM LESSENS THE DANGERS OF FUEL MONITORING BY KRISTIANA INDRADAT

NVIRONMENTAL REFUELLING

Systems Inc.’s modular hydraulic fracturing (“frac”) fuel delivery system, Frac Shack, has already been called an industry standard. The self-contained unit that removes workers from the hazards of working on a hot frac pad and minimizes the risk of fuel seeping into the environment is equipped with a patentpending, real-time fuel monitoring system – a system that allows operators to see what’s happening in frac pumper saddle tanks without exposing themselves to danger. Todd Van Vliet, President of the Edmontonbased fuel management company says, “Nobody has to worry about who is there and whether the pumpers are getting low on fuel or whether they are going to overfill them. It just takes the whole concern over fuel right out of the equation so the engineers and operators can then focus on just getting the job done.”

With explosions and fires having been reported in areas such as the Marcellus Shale in the northeastern United States, absolute safety and precision is top priority for Environmental Refuelling Systems. Overfilling tanks raises the likelihood of dropping diesel fuel on the ground or in the worst case, Van Vliet says, spraying diesel fuel onto hot engines. Up-to-the-minute data about fuel levels in the saddle tanks of each frac pumper is transmitted to the control room in the Frac Shack via a wireless reader on each of the refuelling heads. Audible and visual cues alert operators when fuel levels are low or when fuel tanks are full. In the latter case, automatic valves are programmed to close, removing the possibility of overfilling the tanks. A visit to operations in the Horn River Basin shale play in the summer of 2009 prompted Van Vliet and his brother Scott, who is Executive Vice President of the company, along with colleague Glen Brotzel to develop the frac fuelling delivery system. “We’ve spent a lot of time and effort to try and make it right,” says Van Vliet, who adds that many safeguards have been added to the system to minimize risks as much as possible. Frac pumpers often operate around the clock, pumping at 15,000 pounds per square inch of fracturing fluid at their full capacity, says Van Vliet. “If they’re pumping hard and one piece of pump gives way or there’s a hole in something, somebody’s going to be seriously injured,” he says. Sometimes

SAFER CONDITIONS: An overview shot of Nexen’s massive Horn River Basin play, Dilly Creek, where the Frac Shack is used

PETROLEUM SERVICES NEWS

FRAC SHACK SITES: The company’s operating units at a lease near Dawson Creek (left) and at the Dilly Creek Site (right)

up to 30 frac pumpers are lined up so closely that walking in between them is near impossible. Add to that mix of challenges the searing 300-degree Celsius heat generated by the locomotive engine and the frac pumper it powers. The environment is aptly called a hot zone. Yet, Van Vliet saw workers endure those conditions in order to refill fuel tanks or troubleshoot problems. “They were doing a great job, but none of us want our people there,” he says. “I was horrified.” In addition to safety benefits, the “plug and play” feature of the fuel head and the reduced downtime in refuelling pumper tanks has produced efficiencies in the process that the company hadn’t expected. “The theory is that when we pull into a site, it doesn’t take us long to rig up because all we do is put on the right adaptor for the client’s system, throw on the fuel heads and you’re ready to go,” says Van Vliet. “When we worked with Nexen at their Dilly Creek operation, that frac took them eight or nine days less than they had scheduled and one of the reasons

is they didn’t have to hold up any of the fracing waiting for refuelling,” he adds. The real-time monitoring system might help avoid a costly bill as well. Van Vliet says a ruined injector caused by a frac pumper running out of fuel could set a company back $30,000 to $90,000 in repairs, never mind the economic damage of possibly losing a frac completely. Currently the company has three operating units that have returned from fracs north of Fort Nelson and south of Dawson Creek. “There are a few things we can do to make them more efficient and a little more comfortable for the operator, but we’re really happy with the performance and everyone that we’ve dealt with has been really pleased too.”

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11/10/10 3:18:46 PM

COMMUNITY MATTERS IN MARCH, THE TEAM OF 911 INDUSTRIAL RESPONSE PROVIDED MEDICAL CARE AT THE ARCTIC WINTER GAMES IN GRANDE PRAIRIE

First

SAFETY

FORMER COMPETITOR RETURNS TO WINTER GAMES WITH TEAM OF STAFF

MEANINGFUL EXPERIENCE that felt good – that is how Tanya

Janssens-Brewster sums up her company’s volunteer work at the 21st Arctic Winter Games hosted by Grande Prairie in March 2010. “It was really exciting and there was just so much energy at the Games,” she adds. Janssens-Brewster, President of 911 Industrial Response Inc., and 15 of her employees provided medical care to attendees, including athletes, coaches and the public, for more than 30 shifts throughout the week-long Winter Games. Such work is nothing new for 911 Industrial, a Grande Prairie-based company that provides emergency medical care for industrial sites and frequently volunteers its services at events in the community. The Games are a biennial sports competition for youth athletes from around the globe living in communities north of the 55th parallel. Janssens-Brewster was herself a former Artic Winter

BY CAILYNN KLINGBEIL

Games competitor, participating in figure skating when she was 13 and the Games were held in the Yukon. She understands firsthand the opportunity the Games present for youth living in the world’s northern communities, many of whom she says might not otherwise leave their home countries, let alone visit Canada. The ability to be a part of the Games “on the other end” was behind Janssens-Brewster’s motivation for volunteering her company’s services. “They couldn’t have the Games without medical coverage,” she says. 911 Industrial employees enjoyed the opportunity to give back to their community and be a part of the celebration of sport, social exchange and cultures. “Most of the people who work here are involved in sports,” says Janssens-Brewster. “So to be able to help out those kids and provide a safe environment for them to compete in – it felt good.”

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