Petroleum Services Association of Canada News Winter 2010

albertaisenergy.ca

Alberta is Energy is supported by several Alberta business associations, many of which are focused on the oil and gas sector.

our futureour futurebuilding

The world is watching Alberta.

We are the kind of place that can attract and hold investment – whether it be time, money or human capital. To realize our potential we need to remain competitive.

Being competitive means jobs for Albertans – not only in oil and gas production and construction, but also hotels, restaurants, accounting firms, transportation companies and more.

Every dollar invested in the province’s oil and gas industry creates three dollars of value for Alberta’s economy.

000PSN.ABEnergy_FP_wBL.indd 1 11/16/10 12:47:32 PM

PM#40020055

NEWS

W I N T E R 2 0 1 0

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

PSAC introduces a new name and look for your magazine

PSAC_Winter2010_p32-01.indd 2 11/22/10 2:44:38 PM

10

15

20We put our energy into knowing your business.Managing resources, maximizing investment and mitigating risk can be very diffi cult without the right strategy and

insight. At MNP, our team of Oilfi eld Service advisors are industry specialists who are equipped to handle challenges

specifi c to the Oilfi eld Service sector. Leveraging off of this experience — we will help you anticipate risk, optimize the

performance of your company and provide practical strategies to keep your business competitive and profi table.

To fi nd out how MNP can fuel your business, contact Dustin Sundby- CA, Oilfi eld Service Leader at 1.877.500.0779.

Chartered Accountants & Business Advisors 1.877.500.0779 mnp.ca

000PSN.MNP_FP_wBL.indd 1 11/11/10 8:42:53 AMPSAC_Winter2010_p02-03.indd 2 11/22/10 2:47:47 PM

3

Features

Departments47

8

22

23

26

28

30

32COVE

R

CONTENTSW I N T E R 2 0 1 0

FROM THE DRILLING ACTIVITY FORECAST EVENTPSAC’s annual event continues

to draw crowds

OIL AND GAS SERVICE IS BIG BUSINESSPSAC delivers the report on the

services sector, and we’re all in

for some big surprises

HEAD OF THE CLASSAnnouncing the winners of PSAC’s

Education Fund

10

15

20

MESSAGE FROM THE CHAIR

2011 DRILLING ACTIVITY FORECASTCould increased activity be on the horizon

for 2011?

IN THE FIELDAll the news, events and latest announcements

PSAC REACHES OUTPSAC reaches out on behalf of the services

sector in its Public Outreach Program

PSAC IN ACTIONThe latest developments in what PSAC is

doing for its members and industry

BUSINESS MATTERSRamp up your recruitment without getting

employees down

MEMBER PROFILEEnvironmental Refuelling System Inc.’s

Frac Shack keeps workers safe in tough conditions

YOUR COMMUNITY911 Industrial Response Inc.

HEAD OF THE CLASSAnnouncing the winners of PSAC’s

Education Fund

10

28

20

26

PETROLEUM SERVICES NEWS

We put our energy into knowing your business.Managing resources, maximizing investment and mitigating risk can be very diffi cult without the right strategy and

insight. At MNP, our team of Oilfi eld Service advisors are industry specialists who are equipped to handle challenges

specifi c to the Oilfi eld Service sector. Leveraging off of this experience — we will help you anticipate risk, optimize the

performance of your company and provide practical strategies to keep your business competitive and profi table.

To fi nd out how MNP can fuel your business, contact Dustin Sundby- CA, Oilfi eld Service Leader at 1.877.500.0779.

Chartered Accountants & Business Advisors 1.877.500.0779 mnp.ca

000PSN.MNP_FP_wBL.indd 1 11/11/10 8:42:53 AM PSAC_Winter2010_p02-03.indd 3 11/22/10 2:48:00 PM

4

MESSAGE FROM THE CHAIR

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 profi le of the oilfi eld 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 fi restorm 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.

As the Chair of PSAC for 2010-2011, I feel it is paramount that we raise the profi le of the

services industry in the eyes of the public and the government, and continue to keep the

discussion about the signifi cance of the oilfi eld 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 qualifi ed

personnel for years to come.

The results of the PSAC studies, revealing $65 billion of Canada’s GDP is generated by the oilfi eld

services sector and $13 billion in revenues is generated abroad by Canadian-based oilfi eld 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 profi ts.

Awareness and education will hopefully ensure that PSAC and the oilfi eld services sector are consulted

prior to any signifi cant changes in the future. E&P companies also recognize that the “Big Oil” label

has made it diffi cult, 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 CostonPSAC Board Chair

Ready to Raise Our Profi le

I


Brian Coston, PSAC Board Chair

Sincerely,


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WINTER 2010 VOL 10 • No. 3

PETROLEUM SERVICES ASSOCIATION OF CANADA 1150 800 6TH AVENUE SW

CALGARY, AB T2P 3G3TEL: 403 264 4195FAX: 403 263 7174

SENIOR VICE PRESIDENT: ELIZABETH AQUINEDITOR: HOLLY KERR

PETROLEUM SERVICES NEWS IS PUBLISHED FOR PSAC BY

VENTURE PUBLISHING INC. 10259-105 STREET,

EDMONTON, AB T5J 1E3TEL: 780-990-0839FAX: 780-425-4921

TOLL-FREE: [email protected]

PUBLISHER: RUTH KELLYASSOCIATE PUBLISHER: JOYCE BYRNE

MANAGING EDITOR: STEPHANIE SPARKSEDITORIAL INTERN: CAILYNN KLINGBELL

CONTRIBUTING WRITER: KRISTIANA INDRADATART DIRECTOR: CHARLES BURKE

ASSISTANT ART DIRECTOR: COLIN SPENCEPRODUCTION COORDINATOR: BETTY-LOU SMITH

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PRINTED IN CANADA BY RHINO PRINT SOLUTIONS. RETURN UNDELIVERABLE MAIL TO 10259 105 ST. EDMONTON AB T5J 1E3.

[email protected] • PUBLICATIONS AGREEMENT #40020055 CONTENT MAY NOT BE REPRINTED OR REPRODUCED WITHOUT PERMISSION FROM PSAC.

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.

Cert no. SW-COC-000952


6 PETROLEUM SERVICES NEWS

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WWW.PSAC.CA 7

DRILLING FORECAST

HE 2011 CANADIAN Drilling Activity Forecast, re leased

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 fi ve 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

On the Up and Up

Tforecasting increased drilling in oil areas like Saskatchewan and north-

eastern Alberta. Gas pricing, on the other hand, remains relatively low

and we are not expecting any signifi cant 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).

PSAC FORECASTS INCREASED OIL PATCH ACTIVITY FOR 2011

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9,000

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FORECASTED NUMBER OF WELLS DRILLED FOR 2011

B.C. 700 (+1%)

Saskatchewan3,050 (+16%)

Manitoba550 (+10%)

Alberta 7,915 (+5%)



WE ASKED, YOU ANSWERED and we listened! PSAC ran an

OnStream reader survey over the summer months and received some terrifi c

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

participation.

OUR QUARTERLY MAGAZINE, formerly known as

OnStream, is the offi cial voice of PSAC. It has evolved since its

early days as a hand-typed newsletter to a tabloid-style printed

newsletter to the full-fl edged 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 benefi t 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 fi rst 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 oilfi eld 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 oilfi eld

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

[email protected].

In Edmonton, contact Leslie Hastman at 780-990-0839 ext. 246 or

[email protected]. You can also visit:

www.advertisewithventure.com.

Goodbye OnStream, Hello Petroleum Services News

IN THE FIELD News, events and activities in the industry

Results of Our Reader Survey

IPOD TOUCH WINNER: Brenda Arbeau’s daughter Megan holding her new prized possession


WWW.PSAC.CA 9

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 fi ve 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 benefi t from KPMG’s generous

support of the Education Fund.”

PSAC’s Education Fund is dedicated to

encourage learning and building the future work-

force 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

certifi cate, 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.

PSAC and KPMG Announce New Scholarship

COMING EVENTS

PSAC STARS & SPURS GalaJanuary 22, 2011, BMO Centre,

Stampede Park, Calgary, Alberta

www.psac.ca/events

PSAC Spring ConferenceApril 12 & 13, 2011

Red Deer, Alberta

www.psac.ca/events

PSAC Mid-Year Luncheon and Drilling Activity ForecastApril 2011, Calgary, Alberta

www.psac.ca/events

Petroleum Safety ConferenceMay 4-6, 2011

Banff, Alberta

www.enform.ca/events

NEW MEMBERS

REGULAR MEMBERSBlack Diamond Group Ltd.

DNV Energy Canada

E-MAC Corrosion Inc.

North American Pipeline Inc.

Triple T Oilfi eld Services

ASSOCIATE MEMBERSDitch Hitch

Integrated Risk Management

Techworks Solutions Providers Inc.

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

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 fi rsthand the negative effects of the National Energy Policy, and the fi rst 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

fi rst words of advice to me as the incoming President and CEO: “We are here to serve the PSAC

membership fi rst and foremost.” I have taken these sage words to heart. In previous services sector slow-

downs, 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. SalkeldPSAC President

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.

For Roger’s a Jolly Good Fellow…

MARK A. SALKELD



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 offi cially 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.

Member company representatives reviewed

fi nancial 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 OUTLOOKIt 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, oilfi eld 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:

ForecastDrilling

ACTIVITY

E

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

FROM THE

STAND AND DELIVER

Outgoing Chair David Yager

presents his Year in Review


– Brian Coston, 2010-2011 PSAC CHAIRMAN

WWW.PSAC.CA 11

DAF AND AGM

• 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.

INDUSTRY DINNERPSAC 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

“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.”

INDUSTRY OUTLOOK

A crowd of 300 await the

perspectives of industry

experts on drilling activity

levels for 2011

SHAKE ON IT

Outgoing President Roger Soucy

welcomes incoming President

Mark Salkeld


DAF AND AGM


000PSN.KPMG_FP_wBL.indd 1 11/11/10 2:05:53 PM

the best industry in the world.”

He adds, “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.”

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.

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 oilfi eld 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 oilfi eld services sector to the Canadian economy – that it is a $65-

billion 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

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 Oilfi eld 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 Oilfi eld Services Canada

Columbia Oilfi eld 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 Oilfi eld 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.

PSAC LONG STANDING MEMBERS 2011

DS AWARD RECIPIENTS

CANADIAN DRILLING ACTIVITY FORECAST SESSION

SPONSOR:

MEDIA SPONSOR:

INDUSTRY DINNER CO-SPONSORS:

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

Heather Barratt Champion Technologies Ltd.

Martin Blair Weatherford Canada Partnership

Clyde Bonnell National Oilwell Varco

Jesse Clifford Stream-Flo Industries Ltd.

Todd den Engelsen Canyon Technical Services Ltd.

Harold Drok Flint Energy Services Ltd.

Lee Emond Import Tool Corp. Ltd.

Brian Farmer Trojan Safety Service

Fred Farmer Halliburton Group Canada

Glen Gibling Halliburton Group Canada

Tracee Gillman Prudential Energy Services

Doug Klaning Halliburton Group Canada

Robert Knowles Weatherford Canada Partnership

Murray Lambkin Sanjel Corp.

Garry Lane (ret.) Strike Energy Services Inc.

Ron Logan Strike Energy Services Inc.

Rachael Lusk Sanjel Corp.

Stacey Marr Weatherford Canada Partnership

David McHattie Tenaris Global Services Inc.

Lucas Mezzano DYNAenergetics Canada Inc.

Lorraine O’Donnell Nabors Canada

Dave Osborne CEDA International Corp.

Brian Paisley Nabors Canada

Gail Purdy National Oilwell Varco

Mark Ravlich Essential Energy Services

Rob Ryan Hallmark Tubulars Ltd.

Stacy Saunders Kodiak Wireline Services Ltd.

Warren Schick Sanjel Corp.

Greg Steffensen Newalta Corporation

Travis Strube Topco Oilsite Products Ltd.

Renee Vanderwolf National Oilwell Varco

Wendy Watson Trican Well Service Ltd.

Ross Whelan High Arctic Energy Services


000PSN.KPMG_FP_wBL.indd 1 11/11/10 2:05:53 PMPSAC_Winter2010_p10-13.indd 13 11/22/10 3:05:16 PM


www.hallmarksolutions.ca

910, 225 5th Avenue SW, Calgary, Alberta T2P 3G6 CANADA

Telephone (24-Hours): 403 266 3807 Facsimile: 403 266 6282

Tubulars

Technical Services

Integrated Tubular Solutions

From Mill to Wellbore

As one of the largest OCTG and line pipe distributors in Western Canada, Hallmark continues to provide customers with a complete solution for

tubular products and services.

For further information please call 403-266-3807 or visit our website at www.hallmarksolutions.ca

Your Complete Solution...From Mill to Wellbore

Hallmark is celebrating 30 years in

business and would like to thank you for your continued support.

Tubulars

Technical Services



CELEBRATING

YEARS

000PSN.Hallmark_FP_wBL.indd 1 11/24/10 10:45:06 AMPSAC_Winter2010_p14-19.indd 14 11/24/10 10:54:31 AM

15WWW.PSAC.CA

www.hallmarksolutions.ca

910, 225 5th Avenue SW, Calgary, Alberta T2P 3G6 CANADA

Telephone (24-Hours): 403 266 3807 Facsimile: 403 266 6282

Tubulars

Technical Services



As one of the largest OCTG and line pipe distributors in Western Canada Hallmark continues to provide customers with a complete solution for

tubular products and services.

For further information please call 403-266-3807 or visit our website at www.hallmarksolutions.ca

Your Complete Solution...From Mill to Wellbore

Hallmark is celebrating 30 years in

business and would like to thank you for your continued support.

Tubulars

Technical Services



CELEBRATING

YEARS

000PSN.Hallmark_FP_wBL.indd 1 11/18/10 12:23:48 PM

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 quantifi ed 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 profi ts 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.”

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 im-

pressive statistics that were uncovered.

Big BusinessSECTOR

PSAC MEMBERS KNEW IT – NOW THE REST OF CANADA KNOWS OF THE WHOPPING ECONOMIC CONTRIBUTIONS MADE BY THE

UPSTREAM OIL AND GAS SERVICES SECTOR

T

ServiceIS

THE OIL AND GASDAVID YAGERPSAC CHAIR, 2009-10



SERVICES SECTOR CONTRIBUTION TO GDPIn 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 TAXESThat 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 EMPLOYMENTIn 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 benefi ts 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

profi tability, 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 oilfi eld 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

PSAC_Winter2010_p14-19.indd 16 11/24/10 10:54:45 AM

17

innovative oilfi eld 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 offi cials, 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 offi cials to

read the report in full,” explains Aquin.

PSAC hopes government offi cials and policy

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 Offi cer for the Alberta Ministry of Energy, affi rms, “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,

fi shers, automotive assembly workers, foresters and miners. But to his

dismay, oilfi eld services jobs don’t seem to have the same recognition.

“When people talk about the oil industry, all they talk about is big

profi ts. 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,

WWW.PSAC.CA

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

“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.” – David Yager, 2009-2010 PSAC CHAIRMAN

innovative oilfi eld services companies bring to Canada. With the

release of the PSAC report, now the rest of Canada will see how

The report makes it clear to policy makers that another

major component of the oil and gas business – beyond PUBLIC ADDRESS

CERI Interim President Peter

Howard shares the results of

the PSAC report


18

PARTNER REPORT ADDS UP SECTOR’S EXPORT CAPACITY


T

Are you TRULY protected?ADVERTISING FEATURE

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

true certifi cation 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!

Certifi cation 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 verifi ed by CGSB on an annual basis can be deemed to be LISTED as certifi ed.

This program extends to the Certifi cation of Finished Garments. Only fi nished 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 verifi cation of compliance.

MWG Apparel Corp of Winnipeg is the ONLY manu-facturer of Flame Resistant clothing that is entitled to display the CGSB Certifi ed label in our clothing.

If at any time it is found that the components or the fi nished garments do not pass subsequent testing, CGSB can and will pull the certifi cation.

There are similar certifi cation 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 certifi ed 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 verifi cation 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 verifi cation. 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.

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

[email protected] or call (204) 786-0246

MWGAPPARELCORP.

Look for this Logo.if the garment does not display this symbol then it is NOT fully certifi ed.

MWG Apparel Advertorial2.indd 1 11/22/10 11:37:27 AM

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 confi rms what PSAC members

already knew: the services sector really does matter. Responsible for

approximately fi ve per cent of all GDP and employment, and four per cent

of all taxes, the sector makes signifi cant economic contributions every

year – signifi cant 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 fi nally receive the attention it deserves.

PSAC’s reports are available on the PSAC website at www.psac.ca.

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 diversifi cation, 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.”


WWW>PSAC>CA 19

T

Are you TRULY protected?ADVERTISING FEATURE

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

true certifi cation 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!

Certifi cation 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 verifi ed by CGSB on an annual basis can be deemed to be LISTED as certifi ed.

This program extends to the Certifi cation of Finished Garments. Only fi nished 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 verifi cation of compliance.

MWG Apparel Corp of Winnipeg is the ONLY manu-facturer of Flame Resistant clothing that is entitled to display the CGSB Certifi ed label in our clothing.

If at any time it is found that the components or the fi nished garments do not pass subsequent testing, CGSB can and will pull the certifi cation.

There are similar certifi cation 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 certifi ed 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 verifi cation 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 verifi cation. 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.

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

[email protected] or call (204) 786-0246

MWGAPPARELCORP.

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

MWG Apparel Advertorial2.indd 1 11/24/10 9:56:20 AMPSAC_Winter2010_p14-19.indd 19 11/24/10 10:55:06 AM


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.

HeadOF THE

PSAC EDUCATION FUND ANNOUNCES SCHOLARSHIP AND GRANT WINNERS

T

ClassSince being established in 2001, the Fund has invested over $140,000 in

the futures of Canadian students. Students pursuing a certifi cate, 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 fi nancial 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.

SCHOLARSHIPSA total of 539 eligible applications were received

for PSAC scholarships in 2010. Applications

covered a variety of fi elds, including engineering,

medicine, technology, business, education, trades

and much more. This year’s recipients of $1,000

scholarships were:

STUDENT NAME COMPANY AFFILIATION SCHOOL AREA OF STUDY Yulia Abramovich Enerfl ex Ltd. University of Calgary Psychology Stefano Arcovio Calfrac Well Services Ltd. Queen’s University EngineeringAngela Misuraca Sanjel Corporation University of Calgary CommunicationsReto Mueller Master Flo Valve Inc. University of Alberta Engineering Adam Thomson Weatherford Canada Partnership University of Alberta Engineering

MEMBER COMPANY SCHOLARSHIP RECIPIENTS


WWW.PSAC.CA 21

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:

» �Effective�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.

Email [email protected] Calgary 403.516.8000 Toll-free 1.800.667.5557 www.enform.ca

000PSN.Enform_1-2H_nBL.indd 1 11/10/10 3:32:49 PM

STUDENT NAME SCHOOL AREA OF STUDYAndrea Buchfi nk University of Alberta EngineeringChloe Curtis Northwest Community College NursingStephanie Eely Langara College NursingSteven Hackman University of Alberta EngineeringColleen Wilson Queen’s University Engineering

SCHOOL GRANTSA 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 lessand 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/PROVINCEAtikameg School Purchase of educational rockets and launch pads Atikameg, AB Beiseker Community School Purchase of TIG welder Beiseker, ABEagle Butte High School Purchase of Vernier probeware Dunmore, ABForestburg School Purchase of lab equipment, chemicals and model kits Forestburg, ABHoly Spirit Catholic School Purchase of robotics equipment Devon, ABJessie Duncan Elementary School Undertake job shadow/oil & gas job bank project Penhold, ABRimbey Junior/Senior High School Purchase of double reel cable holder for welder Rimbey, ABSaanich Adult Education Centre Sponsored science fair Brentwood Bay, BCSPIDER Distributed Learning Sponsored fi eld trip to Port of Vancouver petroleum facilities Gibsons, BCSuccess School Purchase of measurement sensors and galvanometer Success, SK

PUBLIC SCHOLARSHIP RECIPIENTS

PUBLIC SCHOLARSHIP RECIPIENTS



S

PsacREACHES

O

OutUR PUBLIC OUTREACHProgram has gained

signifi cant 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 the home for PatchWorks, a long with

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-fi eld” 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.

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


WWW.PSAC.CA 23

Lights, Camera, ActionBRINGING 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.

SOutREGULATORY 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 CABINETAs 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 fi scal 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 DIRECTORSIn 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.

PETROLEUM SERVICES INVESTMENT SYMPOSIUMIn 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 offi cials from 28 publicly traded PSAC member

companies presented their growth strategies to key members of the

North American fi nancial 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 MEETINGApproximately 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 fl ip side, the sector has one

of the highest short-term disability rates amongst all industries

operating in B.C., posing a signifi cant 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

PSAC IN ACTION Keeping the services sector front and centre

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

STRATEGIZING FOR FUTURE GROWTH:

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


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 signifi cantly to our economy — thanks to the generosity of the Johnsons and Cobbes.

sait-promising-futures.ca

TWO COUPLES, ONE GOAL: INSPIRING OTHERS.

000PSN.SAIT_FP_wBL.indd 1 11/11/10 8:46:59 AMPSAC_Winter2010_p22-25.indd 24 11/22/10 2:57:54 PM

WWW.PSAC.CA 25

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 signifi cantly to our economy — thanks to the generosity of the Johnsons and Cobbes.

sait-promising-futures.ca

TWO COUPLES, ONE GOAL: INSPIRING OTHERS.

000PSN.SAIT_FP_wBL.indd 1 11/11/10 8:46:59 AM

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 EDUCATIONA 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 post-

secondary 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 opportuni-

ties in the petroleum industry and help to develop the future workforce.

(More detail in article on p.20)

PRIVACY CONCERNS ADDRESSEDIn 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

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 LUNCHEONPSAC 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 LLOYDMINSTERAs part of PSAC’s commitment to partner with the other trade

associations to ensure the industry is unifi ed 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 SERVICESOn 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 signifi cant 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.

PSAC IN ACTION: Keeping the services sector front and centre

GROUNDBREAKING STUDY:

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

Education Fund Golf Classic


26 Petroleum services news

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.

A

BUSINESS matters

Ramping Up Recruitmenthow should emPloyers aPProach hiring efforts following recent layoffs?

by CaIlyNN KlINgBEIl

Kelly Burake, Logistics Manager at DMK Drilling Fluids Ltd., has witnessed

hiring challenges firsthand in recent months. While DMK’s Grande Prairie-

based 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.”


WWW.PSAC.CA 27

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Justify your hiring actionsCurrent 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 strategiesRecruitment 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 marketsWhen 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 yourselfCompanies 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 positivesThe 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.

SOLUTIONS FOR EMPLOYERS RAMPING UP RECRUITMENT


28

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 patent-

pending, 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 Edmonton-

based 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 overfi ll 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.”

The New Standard

E

MEMBER PROFILE

With explosions and fi res 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. Overfi lling

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

overfi lling 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 fl uid 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

EDMONTON COMPANY’S INNOVATIVE SYSTEM LESSENS THE DANGERS OF FUEL MONITORING

BY KRISTIANA INDRADAT


SAFER CONDITIONS:

An overview shot of Nexen’s

massive Horn River Basin play,

Dilly Creek, where the Frac Shack

is used


29

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To learn more or to book this training, please contact:Ricardo Carlos | Manager, Cultural Crossroads p: 780.425.4644 ext. 5 | e: [email protected]

www.cfrac.com

000PSN.CtrR&C_1-2H_nBL.indd 1 11/10/10 3:18:46 PM

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 refi ll fuel

tanks or troubleshoot problems.

“They were doing a great job, but none of us want our people there,” he says.

“I was horrifi ed.”

In addition to safety benefi ts, the “plug and play” feature of the fuel head and

the reduced downtime in refuelling pumper tanks has produced effi ciencies 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 effi cient

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.”

WWW.PSAC.CA

FRAC SHACK SITES:

The company’s operating units at

a lease near Dawson Creek (left)

and at the Dilly Creek Site (right)


A

FirstSAFETY

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

1817 10th Avenue SW Calgary, AB T3C 0K2 Telephone (403) 266-4094 Fax (403) 269-1140

Docket: 33656 Due Date: Nov.10.10 Client: ATB Description: Corporate Financial Services Ad: SanjelSize: 8.25"x10.75" (8.75" x 11.25" bleed) Insertion Date: Winter Issue Publication: PSCA News Colour: cmykAccount Ex: N.Moe Designer: S.Shymko Production: B.Pfleger

COMPANIES THAT RESPOND NEED COMPANIES THAT RESPONDLike Sanjel, more and more of Alberta’s top companies want ATB as their financial partner. ATBresponds.com

Response. Results.

®ATB Corporate Financial Services is a registered trademark of Alberta Treasury Branches.

000PSN1.ATB_FP_wBL.indd 1 11/10/10 2:38:20 PM

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

Games competitor, participating in fi gure skating when she was

13 and the Games were held in the Yukon. She understands fi rst-

hand 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.”


COMMUNITY MATTERS

BY CAILYNN KLINGBEILFORMER COMPETITOR RETURNS TO WINTER GAMES WITH TEAM OF STAFF


First

1817 10th Avenue SW Calgary, AB T3C 0K2 Telephone (403) 266-4094 Fax (403) 269-1140

Docket: 33656 Due Date: Nov.10.10 Client: ATB Description: Corporate Financial Services Ad: SanjelSize: 8.25"x10.75" (8.75" x 11.25" bleed) Insertion Date: Winter Issue Publication: PSCA News Colour: cmykAccount Ex: N.Moe Designer: S.Shymko Production: B.Pfleger

COMPANIES THAT RESPOND NEED COMPANIES THAT RESPONDLike Sanjel, more and more of Alberta’s top companies want ATB as their financial partner. ATBresponds.com

Response. Results.

®ATB Corporate Financial Services is a registered trademark of Alberta Treasury Branches.

000PSN1.ATB_FP_wBL.indd 1 11/10/10 2:38:20 PM

BY CAILYNN KLINGBEIL


albertaisenergy.ca

Alberta is Energy is supported by several Alberta business associations, many of which are focused on the oil and gas sector.

our futureour futurebuilding

The world is watching Alberta.

We are the kind of place that can attract and hold investment – whether it be time, money or human capital. To realize our potential we need to remain competitive.

Being competitive means jobs for Albertans – not only in oil and gas production and construction, but also hotels, restaurants, accounting firms, transportation companies and more.

Every dollar invested in the province’s oil and gas industry creates three dollars of value for Alberta’s economy.

000PSN.ABEnergy_FP_wBL.indd 1 11/16/10 12:47:32 PMPSAC_Winter2010_p32-01.indd 1 11/22/10 2:44:54 PM

Documents

Petroleum Services Association of Canada News Winter 2010