Petroleum Services News - Summer 2012

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6; A52 36291 News and notes from the industry

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Features

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Advocacy initiatives from PSAC spread far and wide

?21B06;4 @.32AF ?6@8@ Pushing a culture of safety from the top of organizations has helped reduce injuries in the industry

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When entering a foreign market it will take patience to stay on the right side of the law

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Prudential Energy Services Ltd. develops a mobile fluid storage system

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PSACâ&#x20AC;&#x2122;s annual spring conference provides attendees with the skills and information needed to recruit and retain employees

Up close and personal with two members of PSACâ&#x20AC;&#x2122;s Board of Directors: Wally Dumont and Ray G. Mills

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PSAC joins a delegation representing Canadaâ&#x20AC;&#x2122;s energy sector at the China International Petroleum and Petrochemical Technology and Equipment Exhibition

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Ready to Take the Lead

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9/2?A. C<A2?@ .;1 =<96A60.9 </@2?C2?@ were woken up

to the fact that election polling can lack any predictive value in April.

Prior to election night, pundits bravely moved away from the genius of hindsight to forecast an election result of historic proportions. And I don’t want to commit the same error of trying to predict future events, but here I go.

I am asked frequently what I think the future of Canada’s energy industry looks like.

Low gas pricing, a widening differential, world economic slowdown, limited access to new markets and global attention on Canada’s development of the oilsands together cast a negative view of the future. To the extent election polls are nothing more than public opinion polls, our industry similarly tracks “favourability” ratings by polling the broader public to unveil perspectives on the industry – about what we do and just how we do it. I’ll sum up some of those polls simply by saying that we have some work to do.

It’s worth noting that we do things differently here in Canada’s oilpatch and it’s :VXR 2QZ\[Q` =@.0 /\N_Q 0UNV_ important that we turn outward to the broader national and international stages to tell our story which is one of service, supply, innovation, and strong environmental and safety performance. Our industry has much to boast about and many reasons to be optimistic about the road ahead. So what does that mean for the future of our industry? Well, in short, I predict that Canada will become the world’s energy powerhouse.

Why can I be so confident? Unlike pundits and pollsters of late, I am basing my prediction on a couple of certainties. Canada’s services sector is a leader in the innovation and technological development of the industry which is allowing for more efficient, productive and advanced drilling. This results in access to plays once thought unreachable and others that were previously economically unviable to develop. Innovation is also driving marked improvements in the footprint of our operations, decreasing surface footprint and the materials required, while vastly expanding below surface reach. Our services sector is also a world leader in advancing health and safety standards, and initiatives that typify the operations of PSAC members. We have come to understand that stringent safety management systems are imperative and actually pay off in positive returns to the bottom line.

The second quarter update to PSAC’s 2012 Canadian Drilling Activity Forecast which trimmed forecasted activity still projects increased activity as compared to last year, and our sector is very active in recruitment efforts so we can meet the needs of our customers. Industry is working hard and is engaged in ongoing discussions with policy-makers about ways to further enhance access to domestic labour pools as well as making foreign worker programs more flexible to local labour needs. With recent announcements about improvements in the regulatory review of projects and current proposals to increase access to new markets, demand side pressures we face may soon find some resolve. These are all good signs of things to come.

My involvement with the PSAC Board of Directors further strengthens my confidence of hanging my hat on a prediction of a bright future for Canada’s oil and gas industry, and the services sector specifically. PSAC is working hard on a number of fronts including labour, health and safety, and public communication and dialogue that will contribute directly both now and down the road to the future success of the sector and the industry more broadly.

The PSAC Board will continue to provide support and strategic direction ensuring that member’s needs are heard.

So how long until I see my prediction coming true? How long until Canada can confidently claim powerhouse status? I won’t go so far as to peg a date, but I will say that we are close. For all of the reasons I have set out, I believe we already have one foot squarely planted in the position of leadership. The continued work by PSAC and other industry groups to coordinate efforts across industry and government has set the other foot in motion to a position where Canada will stand proudly as the energy leader on the world stage.

Sincerely,

Mike Edmonds PSAC Board Chair

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Leaders in Safety and Training for the Oil and Gas Industry Enform is the safety association for Canadaâ&#x20AC;&#x2122;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: Âť Effective training, including courses on general and operational safety programs and petroleum fundamentals Âť Expert audit services Âť Professional advice Our vision is no work-related incidents or injuries in the Canadian upstream oil and gas industry.

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News, events and activities in the industry

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SAIT Polytechnic awarded a PSAC funded scholarship to Steven Lee, a student enrolled in the Petroleum Engineering program. PSAC provides scholarship support through the PSAC Education Fund for students at technical schools in petroleum-related and trades programs at Northern Lights College, Keyano College, NAIT, SAIT and SIAST. For more information about PSACâ&#x20AC;&#x2122;s Education Fund scholarship program, please visit www.psac.ca.

=@.0 .[[bNY 4R[R_NY :RRaV[T November 6, 2012 TELUS Convention Centre Calgary, Alberta =@.0 0N[NQVN[ 1_VYYV[T .PaVcVaf 3\_RPN`a N[Q 6[Qb`a_f 6[`VTUa` 1V[[R_ November 6, 2012 TELUS Convention Centre Calgary, Alberta For more information on all PSAC events, visit: www.psac.ca/events

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Building a Skilled Workforce

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Columbia Industries Enterprise Commercial Trucks

@;B//6;4 @2?C602@ Jason Barnes Chad Barney Dylan Begg Vincent Boscher Darcy Bustin Dominic Clouthier Stacy Compton Colby Debolt Dave Dixon Cory Dobbin Graham Fraser Bo Gawryliuk Todd Gripich Bryce Jones Max Keeler Scott Kesterke Tyler Kludash Jason LaRoche Justin MacIver Cory D. Martin

. ;Rd 3NPR Na =@.0 A52 =2A?<92B: @2?C602@ Association of Canada (PSAC) recently welcomed accountant Aadil Edoo to the team. With more than four years of financial experience in the services sector, Aadilâ&#x20AC;&#x2122;s primary responsibilities include financial reporting and analysis, budgeting and payroll requirements. Aadil also oversees all membership renewal dues, product sales and event registrations.

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recognize those individuals who received their PCP in 2011. The PCP is managed by the Petroleum Human Resources Council of Canada. For more information visit www.petrohrsc.ca.

Tom Matthews Robert McLoughlin William McRae Jason Melenchuk Joe Merrick Roy Muckler Devan Nusse Carl Nylen Johnathan Perry Derrick Pruden Travis Reschny Chad Rowe Stephane Sauve Logan Shantry Stephen Sheppard Stephen Towns Jason Wilson A?.;@=<?A.A6<; Lawrence Borowic Melvin Budge

D299 A2@A6;4 Dorrell Amos Joseph Arkinstall Bryce Baloun Brian Belcourt George Benoit Jason Brooks Glen Cerny Matthew Croll Craig Crosby Dan Delinger Tom Delinger Edward Giroux Trevor Gordon Chad Graham Kyle Gross Jim Harpell Ayden Harris Jerry Hernandez Darrell Horton Taylor Howarth

Jeffrey Hurley Michael Ivey James Johnson Ashim Joseph Robert McBride Ronald McCoy Rhett McDaniel Thomas Minder Patrick Mones Mathieu Oâ&#x20AC;&#x2122;Handley Kenneth Ostare Marshal Petersen Brad Reeves Brady Saunders Cody Strickland Keith Tetachuk Jeremy Welker Cole Woods Stephen Woychyshyn

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the Petroleum Services Association of Canada (PSAC) released its mid-year update to the 2012 Canadian Drilling Activity Forecast, predicting a slight increase in Canadian drilling activity levels from the previous year.

The revised forecast for 2012 is a total of 13,150 wells drilled (rig released) across Canada, representing a two per cent increase in total wells drilled over 2011. The fi nal tally for 2011 was 12,850 total wells drilled.

The 2012 revised forecast represents only a slight decrease of 200 wells from PSACâ&#x20AC;&#x2122;s January update which pegged activity for the year at 13,350 wells drilled. The second quarter decrease is largely attributable to the decline in gas drilling due to record lows in natural gas pricing. â&#x20AC;&#x153;There have been some conditions that have impacted expected drilling activity

that were beyond our industryâ&#x20AC;&#x2122;s control,â&#x20AC;? says Mark Salkeld, PSAC president and CEO. â&#x20AC;&#x153;That said, productivity so far this year is high and activity is still on the uptick.â&#x20AC;?

The overall decrease to the forecast since November is attributable to declining gas prices, labour shortages, balmy weather at the outset of the year and world economic conditions including the European debt crisis. PSAC is basing its updated 2012 forecast on average natural gas prices of CDN$1.90/mcf (AECO) and crude oil prices of US$100/barrel (WTI). â&#x20AC;&#x153;We have to bear in mind that the days of 20,000 plus wells are likely not to return any time soon, and thatâ&#x20AC;&#x2122;s largely due to the fact that we are drilling longer and more complex wells now that are accessing plays once thought unreachable or fully tapped,â&#x20AC;? Salkeld adds.

â&#x20AC;&#x153;The first quarter of 2012 saw average well depth reach beyond 2,000 meters and is a sure sign that our industry now operates very differently than even just five years ago when vertical wells were still the prominent well type and technology. We are forecasting horizontal wells to make up over half of all well types this year which is a marked increase from the horizontal well count of 2007 which leveled out at only 13 per cent of total wells.â&#x20AC;?

When used in conjunction with the PSAC Well Cost Study, the Canadian Drilling Activity Forecast can be used to determine potential market sizes for drilling and completion products and services, as well as pricing and activity direction. For more information about how to subscribe to the Drilling Activity Forecast or Well Cost Study, contact PSAC at info@psac.ca or 403-264-4195.

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ith several pieces of heavy equipment moving around a wellsite and thousands of pounds of pressure being used, thereâ&#x20AC;&#x2122;s a big element of human risk in the field.

When an incident does take place in the oilpatch it reflects negatively on the entire industry, which is why Canadaâ&#x20AC;&#x2122;s oil and gas industry is at the forefront in adopting cross-industry initiatives that have reduced injuries substantially over the years. Many companies have taken a leadership role by moving beyond just having safety programs to creating safety cultures that span their entire operations.

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So, rather than being seen as a constraint on business, safety has become a competitive advantage for Canadaâ&#x20AC;&#x2122;s operators and service companies alike. Roy McKnight, manager of Industry Initiatives for Enform, says all players on a worksite â&#x20AC;&#x201C; operators, drillers, trucking companies and service companies â&#x20AC;&#x201C; contribute to the overall picture that shows productivity and injury rates going in opposite directions. â&#x20AC;&#x153;Companies are implementing proper health and safety management systems, taking corrective and preventive action. Weâ&#x20AC;&#x2122;re asking really good questions before things go wrong,â&#x20AC;? McKnight says. â&#x20AC;&#x153;Everyone recognizes that itâ&#x20AC;&#x2122;s a shared responsibility, and without collaboration, things break down.â&#x20AC;? â&#x20AC;&#x153;If an incident happens in this industry, people are lucky not to lose a limb or their life,â&#x20AC;? says Ron Harris, quality HSE manager with Firemaster Oilfield Services Inc. Firemaster has been providing safety equipment, services, emergency response and training to the services sector since 1980. There have been many changes to safety regulations over the years, but the industryâ&#x20AC;&#x2122;s drive to get to zero injuries is internally driven. â&#x20AC;&#x153;People are starting to see that safety doesnâ&#x20AC;&#x2122;t have to compete with business priorities,â&#x20AC;? Harris says. â&#x20AC;&#x153;When safety is integrated as a core value and you operate that way, you can still meet deadlines, stay on budget and work safely.â&#x20AC;?

So employees know they are supported by the management team, Firemaster schedules regular field visits from executives and the Red Deer-based company has also reordered all its meetings so that safety is discussed before operations â&#x20AC;&#x201C; a clear message that safety comes first. Another way to gain support for safety initiatives is including the personal values of employees. â&#x20AC;&#x153;Most people come with the value of wanting to go to work, earn a good dayâ&#x20AC;&#x2122;s pay and go home at the end of the day with all their fingers and toes,â&#x20AC;? says Harris. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s on us to nurture that value and help bring it to the forefront and make sure people are thinking about it and working that way.â&#x20AC;?

Firemaster has built a â&#x20AC;&#x153;no blameâ&#x20AC;? incident reporting system, which encourages employees to report incidents and near misses.

Regularly taking a heavy-handed approach to change employee behaviour may discourage employees from being open and removes the opportunity to identify and improve on problematic systems. â&#x20AC;&#x153;Our system doesnâ&#x20AC;&#x2122;t try to assign culpability of an employee. We try to find system failures, explain the facts around what happened and identify steps that the company will take to make sure it doesnâ&#x20AC;&#x2122;t happen again,â&#x20AC;? Harris explains. â&#x20AC;&#x153;We find we get much better results with our workforce when we champion and reinforce the good things they do. They then want to do more of that.â&#x20AC;?

Implementing sound processes, procedures, and health and safety management systems, helps ensure companies meet legal requirements and align with industry best practices. A key to enhancing commitment to those systems is nurturing a companyâ&#x20AC;&#x2122;s safety values and it starts at the top. Strong leadership support is essential to building a safety culture and carrying that culture from the corporate office out into the field. â&#x20AC;&#x153;You have to ensure that at the top of the leadership chain safety is of paramount importance,â&#x20AC;? says Stephen Lockwood, president and co-CEO of Mullen Group Ltd.

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Mullen is based in Okotoks, Alberta and operates 27 businesses, with 18 in the oilfield services sector. There are more than 5,500 employees working for the company and with a good portion of the businesses in transportation, company safety extends far into the field with individual drivers, trucks and load securement. â&#x20AC;&#x153;You canâ&#x20AC;&#x2122;t just speak about safety, you have to emphasize it. The manner in which you do business cannot compromise safety,â&#x20AC;? Lockwood says. â&#x20AC;&#x153;You have to continuously endorse the concept of quality and have it running through the company. If you want to have a quality company, in our case, its total customer satisfaction and they expect a contractor to provide an exemplary safety environment.â&#x20AC;?

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Coaching and developing the right attitudes and values does require work and patience.

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As the industry matures and continues to improve on safety systems, Enformâ&#x20AC;&#x2122;s McKnight predicts safety will evolve to include a deeper, more sophisticated level of investigation into incidents. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve essentially solved the easy problems. Now, weâ&#x20AC;&#x2122;re continuously improving on communication, procedures and getting to the very root cause of incidents,â&#x20AC;? he says. â&#x20AC;&#x153;You may find the cause has nothing to do with industry but more with the psychology of society. Itâ&#x20AC;&#x2122;s going to be a different way of thinking to solve a different kind of problem.â&#x20AC;?

A steady decline in workplace injuries is encouraging to a sector whose potential impact on communities and society is continuously highlighted in the public eye. Itâ&#x20AC;&#x2122;s more reason, McKnight believes, using every tool and approach available from different disciplines â&#x20AC;&#x201C; human resources, business management, training and technologyâ&#x20AC;&#x201D;will be needed to achieve zero injuries. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s going to take a whole culmination of effort, passion and desire to get us there,â&#x20AC;? he says.

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SPE CANADIAN UNCONVENTIONAL RESOURCES CONFERENCE 30 OCTOBERâ&#x20AC;&#x201C;1 NOVEMBER 2012 CALGARY, ALBERTA, CANADA CALGARY TELUS CONVENTION CENTRE

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made up the theme of the Petroleum Services Association of Canada (PSAC) 2012 Spring Conference, which hosted more than 210 delegates on April 17 and 18 in Red Deer, Alberta. With the services sector facing an increasing labour shortage, the focus of the conference was to provide the skills and information oilfield services workers need for success in their careers and to equip employers with tools to recruit and retain employees. These issues were addressed in three education streams: human capital mangement, professional development and transportation management.

Mark Salkeld, PSACâ&#x20AC;&#x2122;s president and CEO, said the labour shortage continues to be an issue as activity continues at a healthy pace. â&#x20AC;&#x153;Land sales are on the increase which is a prime indicator of future activity,â&#x20AC;? he says. â&#x20AC;&#x153;So with this in mind, PSACâ&#x20AC;&#x2122;s Transportation Issues Committee and Human Resources Committee created a program for this yearâ&#x20AC;&#x2122;s conference that placed a strong emphasis on engaging and retaining current employees.â&#x20AC;?

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Delegates heard from experts, including Cheryl Knight, executive director and CEO of the Petroleum Human Resources Council of Canada. Knight shared several fi ndings of a study commissioned by PSAC to assess the skill transferability of workers across Canada. â&#x20AC;&#x153;There are opportunities to transfer workers from other provinces and other sectors within Canada,â&#x20AC;? said Knight during the session. She advised recruiters to scan the news to see where job losses are happening in other areas of the country such as a closure at a mill.

Pierre Thiffault with Transport Canada delivered proactive and well-received messages regarding the importance of improving driver behaviour. A well-known speaker in the transportation field, Thiffault provided attendees with tips on how to change employee attitudes and reduce driver distraction. An additional highlight from the transportation stream included a presentation by Randall Howe and Fred Andersky from Bendix Commercial Vehicle Systems, which aimed to improve workersâ&#x20AC;&#x2122; understanding of stability technology for commercial vehicles. This topic generated a lot of discussion about the new technology and how it applies to both tractortrailer and straight truck applications.

Further conference highlights included a presentation by Jim Tittemore, president

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of Bottom Line Impact, to a full house on the importance of building a performance management tool kit to building a strong team. Tittemore drew upon sports analogies to demonstrate to delegates the importance of coaching, providing immediate feedback and identifying motivators, which he pointed out isnâ&#x20AC;&#x2122;t usually just a pay cheque. He noted, â&#x20AC;&#x153;quite simply, people have to like coming to work.â&#x20AC;?

Bill Isley, manager of organizational learning and effectiveness with the University of Alberta, gave two presentations on strategies to deal with a muilti-generational workforce, an important issue many companies are now grappling with head-on. Isley noted that for the first time in history four generations are working together, each of which has been molded by a completely different set of experiences, which translates into completely different approaches to work. He noted, however, that regardless of how wide the gaps are between the generations, everyone wants to do meaningful work and to be treated with respect in the workplace.

At the conferenceâ&#x20AC;&#x2122;s delegate dinner, Sylvia Yaeger kept the audience in stitches with her keynote address about the impacts of stress and how to manage stress better. Yaegerâ&#x20AC;&#x2122;s engaging presentation highlighted how stress affects the health and performance of workers, including increasing the likelihood of making

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mistakes, taking more time away from work and increasing the risk for serious illness. She recommended using a few simple techniques including breathing and getting more exercise to help keep stress at bay.

PSACâ&#x20AC;&#x2122;s Spring Conference remains the only event designed specifically for oilfield workers and managers. Next yearâ&#x20AC;&#x2122;s PSAC Spring Conference will be held in Red Deer, Alberta, on April 16 and 17, 2013.

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invited Mark Salkeld, president and CEO of the Petroleum Services Association of Canada (PSAC), to join a delegation representing the Alberta oil and gas industry in China, the answer was a resounding â&#x20AC;&#x153;yes.â&#x20AC;? The result was a mid-March whirlwind tour in and around Beijing, as well as the opportunity to represent PSAC member companies at the China International Petroleum and Petrochemical Technology and Equipment Exhibition (CIPPE). The exhibition is the largest of its kind in the world with more than 50,000 international delegates attending.

Salkeld travelled with association peers Mike Dawson, president of the Canadian Society of Unconventional Resources (CSUR), and Mark Scholz, president of the Canadian Association of Oilwell Drilling Contractors (CAODC), as well as Wade McGowan, president and CEO of Ironhand Drilling.

At CIPPE, Salkeld introduced PSAC to more than 250 attendees and provided an overview of the Canadian petroleum services sector. During the exhibition, Salkeld and his colleagues hosted the Alberta booth in the International Pavilion and met many representatives from companies around the world interested in doing business in Canada. â&#x20AC;&#x153;We spoke to a variety of delegates including a China-based equipment supply company currently operating in Syria looking to leave there and set up shop in Canada, and a proppant manufacturing company which dropped off samples of their product,â&#x20AC;? Salkeld says.

PSAC member companies were well represented throughout the exhibition. â&#x20AC;&#x153;Of the hundreds of company displays, there were divisions of PSAC members including Schlumberger, Baker Hughes and National Oilwell Varco (NOV),â&#x20AC;? notes Salkeld. â&#x20AC;&#x153;In short, numerous PSAC member companies are operating in China and their influence on the health and operational culture is growing in that market.â&#x20AC;?

Prior to attending the CIPPE conference, the delegation was hosted by the Great Wall Drilling Company (GWDC) and given a tour of the companyâ&#x20AC;&#x2122;s operations in Pan Jin and the Liaohe oilfield, as well as GWDCâ&#x20AC;&#x2122;s bit manufacturing, directional drilling and hydraulic fracturing branches. GWDC expressed an interest in expanding operations into Canada and are looking to become members of PSAC.

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Canadian embassy representatives also welcomed Salkeld and his peers in Beijing where they were given a high level overview of the embassyâ&#x20AC;&#x2122;s responsibilities in relation to oil and gas initiatives. While at the embassy, they were joined by representatives of the Alberta government who spoke to the processes that are in place to protect intellectual property and patents of Canadian companies. â&#x20AC;&#x153;Once again we were well hosted and have established some great relationships,â&#x20AC;?

Salkeld says. â&#x20AC;&#x153;We are planning follow up meetings with their representatives when they visit Alberta.â&#x20AC;?

Salkeld and his colleagues also met with representatives from the Chinese National Petroleum Corporation (CNPC) and the Alberta Petroleum Training Centre (APTC), a service organization jointly invested in and operated by CNPC and the Government of Alberta. The CNPC-APTC has been playing an active role in strengthening technical exchanges in the petroleum sector between China and Canada, and promoting China-Canada economic and trade relationships in the petroleum industry since 1989.

Salkeld says, â&#x20AC;&#x153;The tour offered us the chance to create awareness of PSAC, Canadian oilfield activity, our safety and unique work culture here in Canada, and to explore many new potential business opportunities in the Asian marketplace.â&#x20AC;?

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S. Hanelt, CFEI, CVFI SCO Fire Investigator/Inspector Safety BOSS Inc.

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and reputation of Canada’s petroleum services sector has opened up foreign markets for local firms, but heading overseas can bring pitfalls, especially in recent years. Although the federal government passed the Corruption of Foreign Public Officials Act in 1998, which made it illegal for Canadian firms to pay for business advantages from overseas officials, enforcement of the law lacked until recently. In 2007, the RCMP established its international anti-corruption unit and since then prosecution of foreign misconduct has grown from 23 investigations in 2010 to 34 in 2011 alone, according to Milos Barutciski, co-chair for the International Trade and Investment Group at Bennett Jones LLP. Barutciski draws on years of experience in international trade and anticorruption law, including stints providing council to several Fortune 500 companies and The World Bank. He thinks avoiding bribery charges is usually more difficult than just closing your eyes and thinking pious thoughts.

“You’ve invested a huge amount of money getting into a country, and then all of a sudden, boom, down comes the shakedown,” he says. “Several years, and tens of millions of investment later, you are suddenly put in jeopardy because of some greedy official in a country on the other side of the planet.”

Giving into this kind of pressure can tempt firms, but yielding to temptation can net a hefty fine, such as the $9.5 million fine that was handed down to a Calgary-based company just last year. Fines at this level could even mean closing the doors of a company. So, it pays to know what to do when approached for the wrong sort of business transaction while working abroad.

92.?; A< ?20<4;6G2 6A Requests for bribes are seldom explicit. Barutciski says long delays in getting business done can be a sign that someone is waiting for an incentive to get a project started. Then, you have to figure out how to nudge things along without paying. “You have to have some experience, and you have to invest the time and the energy,” he says. “Learn a little bit, speak with your council, speak with other companies about some of the strategies you can use. It’s lots of things; not just calling your lawyer at every turn.” ?2.05 56452?

Some officials who cause unnecessary delays in hope of a little palm grease do so without the blessing of their higher-ups. In such cases, it can help to talk to their boss, or their boss’s boss. Barutciski says high-level officials are often as anxious to start producing projects – and royalty payments –

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as the foreign company. The solution, though, does not involve turning the offending party over to authorities. Extorters seldom hand over proof of their intentions, says Barutciski, so it would be hard to make it stick anyway. Instead, he advises using strategic language with the higher-ups, such as “administrative bottlenecks” instead of “blackmail.” /2 =.A62;A Though waiting for a profitable project to start can be agonizing, Barutciski says that steeling your nerve can work wonders. First, this gives you more time to think. “Slow things right down, buy yourself some time and start developing some strategies to ward off these demands and get where you need to get without paying the bribe,” he says. “It’s not always straightforward how you get there.” The second reason simple waiting works is that would-be bribe recipients might not be patient. “At some point they give up. Not all of them, but some of them,” says Barutciski. “There are easier marks out there to spend time on.” =9.; 3<? A52 D<?@A Applying the strategies outlined here, Bartuciski says, can vary greatly with context, geography and other factors. Dealing with a low-level official will be different than figuring out how to stop the criminal desires of a minister of security – a situation which Barutciski says he’s dealt with personally. So even before the situation arises, figure out how to deal with it and talk with as many people as possible when creating a plan. “You have to be cautious, you have to be skeptical, not take things at face value and you have to take your time,” says Barutciski.

When playing a game with such high stakes and variable conditions, it might be the biggest single favour you can do for yourself.

=2A?<92B: @2?C602@ ;2D@

Trusted advisers to Canada’s Energy Services Sector For information on how KPMG can assist you, please contact: Rhys Renouf National Sector Leader, Energy Services (403) 691-8426 rrenouf@kpmg.ca

kpmg.ca

© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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@A?2;4A52;6;4 A62@ D6A5 <AA.D. PSAC met with James Rajotte, M.P. for Edmonton-Leduc and Chair of the Federal Finance Committee, to discuss the economic contributions of the petroleum services sector to the Canadian economy, skilled labour shortage issues and potential labour pilot projects aimed at alleviating the ongoing labour crunch. ?26;3<?06;4 =@.0¡@ C<602 6; /?6A6@5 0<9B:/6.

PSAC met with senior policy officials from B.C.â&#x20AC;&#x2122;s Ministry of Advanced Education to introduce PSAC, the petroleum services sector and its issues related to skilled labour shortages.

A.86;4 =@.0¡@ C<602 A< A52 5699 Before the Alberta election, PSAC travelled to Ottawa with Alberta Deputy Premier Doug Horner and Assistant Deputy Minister of Human Services, Immigration Maryann Everett to support the province in its advocacy efforts on labour solutions for Alberta. PSAC participated in a number of meetings including one held with members of the federal governmentâ&#x20AC;&#x2122;s Alberta caucus to discuss the labour shortages and potential federal government responses that might ease the situation.

The Alberta delegation also met with the Honourable Diane Finley, Minister of Human Resources and Skills Development, to discuss labour issues including the Temporary Foreign Worker Program (TFWP) and time delays in accessing foreign labour pools because of the months it can take to obtain a Labour Market Opinion (LMO). PSAC highlighted challenges with worker eligibility arising from the specific National Occupation Classification (NOC) codes. Minister Finley committed her department to work with PSAC and key officials from the Alberta government on recommendations to deal with the issue.

A meeting was also held with the Honourable Jason Kenney, Minister of Citizenship, Immigration and Multiculturalism, with whom PSAC has met previously on labour issues, to discuss options to alleviate labour shortages.

Minister Kenney has authorized a task force with his Chief of Staff, the Province of Alberta and PSAC to address the difficulties with the NOC codes. =@.0 1296C2?@ 6;1B@A?F¡@ 0<:=2A6A6C2 :2@@.42 A< =?<C6;02 <3 .9/2?A. Before the provincial election, PSAC met with officials from the Alberta government including Deputy Premier Doug Horner, Deputy Minister of Advanced Education and Technology Annette Trimbee and Assistant Deputy Minister of Treasury Board and Enterprise Justin Reimer to discuss the results of a survey conducted by the Alberta Industrial Alliance (AIA).

The AIA is a collaboration of 14 associations, including PSAC, to improve the competitive landscape in the province. The survey results identified priority issues regarding workforce, regulatory compliance and taxation.

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The minister completed a tour of the facility and took time to speak with workers on site.

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concerns about safety and the environment at a well site.

Prudential Energy Services Ltd.â&#x20AC;&#x2122;s sales and marketing coordinator Max Rossiter figured there must be a way of storing fluids on site that didnâ&#x20AC;&#x2122;t require spending up to two days building a berm. Rossiter consulted various oilfield companies and assisted industry veteran Mike Hopp, who designed a solution that was safe and cost effective. The end result of the 18-month process is a patent-pending trailer system with a dual-wall containment system for invert drilling fluid.

Each unit looks similar to a trailer waiting to be hitched to the back of a semi-truck and can store up to 116 cubic metres of fluid. The storage tanks remain inside the self-contained trailer, which also includes a hydraulic system to pump fluids in and out of the tank. To maintain the integrity of the double-wall design, all hoses and pipes come out of the roof of the trailer.

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The master unit on a drill site has a partition, creating two compartments and allowing companies to store both light-weight and heavy drilling fluids in a single tank. The master unit controls operations on a site, while more units can be added for extra capacity. â&#x20AC;&#x153;They are also equipped with digital monitors, so that the engineer on a lease can monitor his fluid levels in the tank and how much fluid he has or doesnâ&#x20AC;&#x2122;t have,â&#x20AC;? says Steve Ferguson, field manager with Prudential in Grande Prairie.

The trailer system was designed to store drilling fluids, but Prudential says the tanks can also be used to store other fluids needed on site, such as diesel or hydraulic fracturing fluids. A full trailer can weigh almost 120 tonnes but it travels empty to a site, so Prudential says they comply with transportation regulations and no special permits or pilot trucks are required when travelling on the highways.

Rossiter says the trailers can be moved from one site to another in a single day. Once on a lease, the trailer is lowered to the ground using two levers. The tank system can be set up with two employees in less than 10 minutes, which eliminates a couple days of work and a full crew constructing a berm. â&#x20AC;&#x153;If you take people out of the situation, you greatly reduce your safety factor,â&#x20AC;? Rossiter says. â&#x20AC;&#x153;This was very important to the energy companies. The other thing just as important was the environmental impact.

We now have a double-wall tanker that is selfcontained.â&#x20AC;? Fluid storage tanks are a marked environmental improvement from the days of drilling pits and companies such as Prudential are finding ways to make implementing these improvements on a well site even easier.

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D.99F 1B:<;A Vice President Operations Clean Harbors Energy & Industrial Services Inc. Years in Services Sector: 34 ?.F 4 :699@ CEO KUDU Industries Inc. Years in Services Sector: 26 D.99F 1B:<;A

63 F<B 0<B91 1< .;F <A52? 7</ <00B=.A6<; D5.A D<B91 A5.A /2, D1' Chef. I enjoy cooking so I always thought I would like to give it a go. ?4:' Farmer.

D5.A 6@ F<B? 3.C<B?6A2 /<<8 <3 .99 A6:2, D1' Eye of the Needle, by Ken Follett. ?4:' Atlas Shrugged, by Ayn Rand.

D5.A ./<BA . 3.C<B?6A2 :<C62, D1' Pulp Fiction with John Travolta. ?4:' Das Boot 63 F<B 0<B91 6;C6A2 3.:<B@ =2<=92 12.1 <? .96C2 A< 16;;2? D5< D<B91 A52F /2, D1' Ralph Klein, Pierre Trudeau and Red Skelton, just to add some flavour to the dinner. ?4:' Ronald Reagan, Winston Churchill, Pamela Anderson.

D5.A 1< F<B A56;8 6@ A52 /6442@A 05.992;42 3.06;4 0.;.1.¡@ 2;2?4F 6;1B@A?F .A A56@ A6:2, D1' Workforce to meet current and growing future demands. This is a better problem than being in a recession. ?4:' Pipelines and ports to overseas markets.

D5.A D<B91 F<B @.F 6@ F<B? /6442@A .00<:=96@5:2;A A< 1.A2, D1' Having helped build and grow a business with a great group of co-workers. ?4:' (For business) growing KUDU in an extremely competitive market.

(For personal) raising great kids.

D5.A :<AA< <? =5?.@2 1< F<B 96C2 /F, D1' Treat people the way you like to be treated. ?4:' Nil Nisi Optimum. (Translation: nothing but the best.)

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63 F<B 0<B91 A?.C29 A< .;FD52?2 6; A52 D<?91 D52?2 D<B91 F<B 4<, D1' Well, I spend most of my life traveling the world, but I have not yet been to Africa. ?4:' Skiing in the interior of B.C. D5605 A.92;A D<B91 F<B :<@A 9682 A< 5.C2, D1' Singing, cannot hold a tune or memorize lyrics. ?4:' Dance.

63 F<B 0<B91 05.;42 <;2 A56;4 ./<BA F<B?@293 D5.A D<B91 6A /2, D1' Maybe a better hard drive or processing system in my brain. I have a lot of information, just sometimes problems locating it in a timely manner. ?4:' Be in better shape.

D5.A 6@ F<B? :<@A A?2.@B?21 =<@@2@@6<;, D1' My health, everything else is immaterial without it. ?4:' 1961 Cadillac.

D5.A 3<<1 1< F<B 0?.C2, /2AA2? F2A D5.A 6@ F<B? @64;.AB?2 :2.9 A5.A F<B :.82, D1' I make pretty good braised beef short ribs, simmered all day long in a red wine broth, similar to Osso Bucco. ?4:' Steak, chocolate, red wine. Signature meal: Caesar salad, steak tenderloin, baked potato, chocolate mousse, Opus (red wine), port and a cigar to finish.

6; D<?1@ <? 92@@ D5.A D<B91 F<B @.F ./<BA 5<D 6@ 4<6;4 A< AB?; <BA, D1' Positive rebound; however, still remaining on pins and needles. ?4:' 2012 will be a much better year than the news predicts.

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WE JUST CHANGED THE WHOLE FRACKING WORLD Simultaneously heat an entire tank farm. Maintain frac fluid temperature. Eliminate scheduling risks. Call us June 1, 2012 to schedule a private demonstration of this game-changing technology.

1-866-247-4460 WWW.ICSGROUP.CA CALGARY U EDMONTON U FORT MCMURRAY U WINNIPEG

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