Swm v1i1 Brazil

Industrial Solutions 1-866-778-3130

www.phoenixindustrial.caISO 9001:2008

Phoenix Industrial, an ISO 9001:2008 certified company, provides integrated single source construction, fabrica-tion and maintenance to the Western Canadian market. We strive to exceed the needs and expectations of our clients. From preliminary planning to completion of a project, Phoenix Industrial utilizes qualified profession-als in all areas of development.

Our people understand the challenges of working in in-dustrial environments, whether it is in the shop, plant or field. We take pride in providing a safe and competent work force.

Industrial Solutions 1-866-778-3130

www.phoenixindustrial.caISO 9001:2008

Phoenix Industrial, an ISO 9001:2008 certified company, provides integrated single source construction, fabrica-tion and maintenance to the Western Canadian market. We strive to exceed the needs and expectations of our clients. From preliminary planning to completion of a project, Phoenix Industrial utilizes qualified profession-als in all areas of development.

Our people understand the challenges of working in in-dustrial environments, whether it is in the shop, plant or field. We take pride in providing a safe and competent work force.

P R O M O T I O N P R O M O T I O N

“Brazil is very promising and of strong interest for us both because of the growing developments there in oil and gas, but also because it is a stable, great place in which to do business. We’ve already met with Petrobras and we’re actively looking as we speak.” ~ Dean Swanberg

5851 San Felipe Suite 850Houston, TX. 77057

Ph: 713-621-8111Fx: 713-621-8333

www.swanberginternational.com

On September 10, 2001, Dean Swanberg arrived in Bridgetown, Barbados to sign the papers needed to start up his Swanberg International.

The next morning, he watched, with the rest of the world, the horrors of the New York City trade centre terrorist attacks.

“I will never forget it, I just sat there thinking, ‘What are you doing setting up an international company when planes are flying through buildings?’ ” reflects Swanberg of a sentiment that belied the good business decisions that he had just made.Swanberg says Swanberg International began as a pull in a direction in which his associates were uninterested.

SWANBERG INTERNATIONAL

“Exploring the international opportunities was always something that interested me, more so than it did or does anyone else with whom I do business here domestically,” says Swan-berg. “That is really what gets me going in the morning, that’s where my business pas-sion lies, in that international market. It just makes sense to me and gets me excited.”A large component that made sense to Swanberg surrounded the fact that he could get an extra 10 or 15 years of productivity out of specialized equipment that continues to be state-of-the-art in certain global mar-kets long after it has run its course in West-ern Canada.

“Canadian oil and gas service and technolo-gy is generally just way more advanced than that of the rest of the world. Our line is also

very specialized, and here in Canada, guys are done with equipment long before its use-ful life is over; we’re spoiled here, we only run the best and the newest. So rather than sell it, I felt I would like to keep it in use to as great of an extent I could somewhere where it was still very relevant and sought after.”Swanberg International grew aggressively as the parent company for four international di-visions: Swanberg Bros. Bolivia Ltda., Swan-berg Bros. Ecuador SA, Swanberg USA Inc., and Swanberg Arabia Company, a joint ven-ture based in Saudi Arabia.In short order and in what Swanberg calls a small world when it comes to moving heavy equipment and dismantling some of the larg-est rigs in the world, the company’s reputa-tion soon became synonymous with excel-

lence and dependability.“I find there are very strong connections in industry on an in-ternational level, much more so than people would realize, and our reach grew quickly in that arena just because people knew there was no project we couldn’t handle and handle well.”Swanberg says that good name grew quickly in large part because of the great reputations of the company’s key prin-cipal managers who had years of collective international ex-perience: Chuck Newcomb, Buck Kilgour, Russ Laing and Max Pattison. The 70 years of excellence in transportation services across Western Canada also added enormously to the success and growth of Swanberg International.Today, Swanberg International specializes in the transport-ing and relocation, dismantling and reassembling of rigs, and is currently working on projects in Louisiana,Texas, Mozam-bique, the Middle East, Bolivia and Ecuador and is actively exploring options in Brazil.

Dean Swanberg


“Brazil is very promising and of strong interest for us both because of the growing developments there in oil and gas, but also because it is a stable, great place in which to do business. We’ve already met with Petrobras and we’re actively looking as we speak.” ~ Dean Swanberg

5851 San Felipe Suite 850Houston, TX. 77057

Ph: 713-621-8111Fx: 713-621-8333

www.swanberginternational.com

On September 10, 2001, Dean Swanberg arrived in Bridgetown, Barbados to sign the papers needed to start up his Swanberg International.

The next morning, he watched, with the rest of the world, the horrors of the New York City trade centre terrorist attacks.

“I will never forget it, I just sat there thinking, ‘What are you doing setting up an international company when planes are flying through buildings?’ ” reflects Swanberg of a sentiment that belied the good business decisions that he had just made.Swanberg says Swanberg International began as a pull in a direction in which his associates were uninterested.

SWANBERG INTERNATIONAL

“Exploring the international opportunities was always something that interested me, more so than it did or does anyone else with whom I do business here domestically,” says Swan-berg. “That is really what gets me going in the morning, that’s where my business pas-sion lies, in that international market. It just makes sense to me and gets me excited.”A large component that made sense to Swanberg surrounded the fact that he could get an extra 10 or 15 years of productivity out of specialized equipment that continues to be state-of-the-art in certain global mar-kets long after it has run its course in West-ern Canada.

“Canadian oil and gas service and technolo-gy is generally just way more advanced than that of the rest of the world. Our line is also

very specialized, and here in Canada, guys are done with equipment long before its use-ful life is over; we’re spoiled here, we only run the best and the newest. So rather than sell it, I felt I would like to keep it in use to as great of an extent I could somewhere where it was still very relevant and sought after.”Swanberg International grew aggressively as the parent company for four international di-visions: Swanberg Bros. Bolivia Ltda., Swan-berg Bros. Ecuador SA, Swanberg USA Inc., and Swanberg Arabia Company, a joint ven-ture based in Saudi Arabia.In short order and in what Swanberg calls a small world when it comes to moving heavy equipment and dismantling some of the larg-est rigs in the world, the company’s reputa-tion soon became synonymous with excel-

lence and dependability.“I find there are very strong connections in industry on an in-ternational level, much more so than people would realize, and our reach grew quickly in that arena just because people knew there was no project we couldn’t handle and handle well.”Swanberg says that good name grew quickly in large part because of the great reputations of the company’s key prin-cipal managers who had years of collective international ex-perience: Chuck Newcomb, Buck Kilgour, Russ Laing and Max Pattison. The 70 years of excellence in transportation services across Western Canada also added enormously to the success and growth of Swanberg International.Today, Swanberg International specializes in the transport-ing and relocation, dismantling and reassembling of rigs, and is currently working on projects in Louisiana,Texas, Mozam-bique, the Middle East, Bolivia and Ecuador and is actively exploring options in Brazil.

Dean Swanberg

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Poised for SuccessThe Centre for Research & Innovation has become the champion for innova-tion and new product development in the Peace Region. Through the CRI, area entrepreneurs and inventors are able to connect with scientists, re-searchers, mentors and investors to help move their ideas forward to com-mercialization.

Although some CRI clients are already exploring international markets, the Centre continues to expand its network of contacts internationally for both markets and investment, readying the road for new, up and coming entre-preneurs.

Recently, CRI director Bruce Rutley, PhD PAg, spearheaded a delegation from the Alberta Association of Colleges and Technical Institutes (AACTI) to Chile. The purpose of the trip was to explore rural innovation and techni-cal commercialization opportunities.

“We now have a South American connection” says Rutley. “We have ac-quired many valuable contacts from Export Canada to six different Chilean universities looking for applied training and research. It’s another door that is now open to the Peace Region.”

At a seminar hosted by the CRI in August, the idea of creating a local An-gel Investment Network was launched. During the seminar, potential angels learned that if they were looking for an excellent return on their money in a relatively short timeframe, they could pool their dollars with other like-minded individuals and fund promising new start-up ventures right here in the Peace Region.

“Our goal was to have one new venture invested in by at least one Angel, and this we achieved,” says Jim Letersky, CRI Adjunct Staff member and Angel workshop organizer. “Over and above this, however, we have opened the eyes of some very influential businesspeople in this town. They liked what they learned and were very impressed with what they saw in our Peace Country entrepreneurs. Now they’ll tell two friends and then they’ll tell two friends and we’ll be back here next year playing to a packed house.”

Although Angel Investing is a new concept in the Peace Region, the idea is fairly established throughout Canada and abroad.

“I was very impressed with the calibre of the entrepreneurs who presented,” says Bill Payne, award winning American Angel Investor and facilitator of the CRI’s seminar. “I believe that some of these businesses are very scalable and may soon move beyond Angel Investment to appeal to Venture Capi-talists outside of this area.”

The Peace Region has a proud innovative tradition to maintain. With only five per cent of the population, the Mighty Peace contributes 40 per cent of all patent inquiries in Alberta. Of note, Alberta holds more patents per capita than any other province in Canada.

As a partnership between Grande Prairie Regional College and Peace River Economic Development Alliance, with significant funding from Rural Alber-ta’s Development Fund, the Centre for Research & Innovation has emerged as the regional champion for Innovation and applied research – both of which are drivers for regional economic development.

5slick world

slick world JournalWorld news that matters to Western Canadians in businessExclusivE onlinE contEnt at www.slickworldonlinE

12

Goliath won’t bE stoppEdWhy Fort McMurray’s economic bubble has not burst despite trouble in the oilpatchExclusivE onlinE contEnt at www.slickworldonlinE

24

into brazilStockwell Day, and a host of Canadians, eye up golden opportunities in South AmericaExclusivE onlinE contEnt at www.slickworldonlinE

36

Table of Contents

From the Editor 8

Contributors 11

Executive Reading Lounge 18

Parting Thoughts 87

CoverPhoto illustration by Tevis Sample, with photos supplied by the Government of Canada

VOLUME 1 ISSUE 1

EdItOrIaLeditorial director Jeff McCoshen

[email protected]

editor in chief Kathryn [email protected]

editorial research assistant Cassidy [email protected]

contributors Lionel FreyJames ChesterErika SherkChelsea Cook

art & dESIgnart director Tevis Sample

[email protected]

graphic design Tamsyn [email protected]

contributing photographers Jeff McCoshenKathryn EngelTevis SampleJames ChesterChelsea CookRandy Vanderveen

OnLInEwebmaster Jim Layher

[email protected]

CIrCULatIOncirculation / subscriptions Melody Sample

[email protected]

MarkEtIngnational sales director Ryan Avery

780.882.1910

british columbia accounts Patti Hanson604.701.9298

alberta south accounts Kelly McCoshen403.880.7432

saskatchewan accounts Lionel Frey780.402.7121

us general accounts David Frankel203.775.3928

texas accounts Peggy Braun903.815.1959

south american accounts Luiz Fernando Souza+55.31.9638.3072

PrOdUCtIOndirector of operations Lionel Frey

[email protected]

Subscription inquiries and back issues:slickworldonline.com | 1-877-754-2560

The

unique

is on its way

Destination:

United Kingdom

magazine

issue ofDecember

Canada’snew

S L I C Kw o r l d o n l i n e . c o m

Join Slick World international journalist James Chester and Slick International’s lead developer Lionel Frey on their expedition to the United Kingdom where Canadians are seizing opportu-nities across the pond.

Hear from Canadians across the UK doing business there, as well as those finding their niche in Western Canada in this special edition on location in the United Kingdom.

And, come along to Saskatchewan, where it’s not only BIG stretches of flawless sky of note these days. Find out about work being done in conjunction with Alberta and B.C. to position to the west as the North American gateway of choice for the important Pacific and Asian economies, amid a collective goal of building on one of the most promising resource bases in the country.

With an unflappable commitment to a 40 per cent cap on ads, space is limited in Canada’s freshest new publication, so book your spot now.

WORLDWestern Canada’sGlobal EntrepreneurMagazine

SFC

All content © COPYRIGHT Slick International Sales Media & Development Inc. All rights re-served. Any use of contents of this publication without the express written permission of the publisher is strictly prohibited. All trademarks are the property of their respective owners. Views expressed by contributors may not be the representative views of the publisher.

7slick worldslickworldonlinE.com

why brazil, why now?Find out why the country represents some of the most brilliant opportuni-ties on the planetExclusivE onlinE contEnt at www.slickworldonlinE

48

brazil bEckons for canadian businEssCanada’s International Trade Minister urges businesses to look further southExclusivE onlinE contEnt at www.slickworldonlinE

38

wEarinG thE flaGWhy the maple leaf may be a company’s most valuable asset when looking beyond Canada to do businessExclusivE onlinE contEnt at www.slickworldonlinE

72

EDITOR BLOGS Our editors offer their assessments and opinions on the latest trends.EXPERT ADVICE Industry specialists give advice, tips and tricks for operating a business, both domestically and abroad.UPCOMING DISPATCHES Where Slick World is going next, and how you can be a part of the action.

pEtrobrasWe take a look at the largest company in the Southern Hemisphere, and what it means to CanadiansExclusivE onlinE contEnt at www.slickworldonlinE

52

thE Good, thE bad, thE uGlyExamining the state of the oil and gas industry in Western CanadaExclusivE onlinE contEnt at www.slickworldonlinE

76

canadians in brazilSmart Canadians are positioning themselves in a lucrative hot spotExclusivE onlinE contEnt at www.slickworldonlinE

63

draGons’ dEnThis month features Arlene Dickinson, a woman with vision who sees the future in the right dealExclusivE onlinE contEnt at www.slickworldonlinE/draGonsdEn

84

SLICKworldonline.com Visit the website for informative additional content

8 slickworldonlinE.comslick world

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Title Space is HereTitle Space is Here

As I was packing my bags for the second of two trips to Bra-zil for the preparation of this inaugural edition of Slick World Magazine, yet another jaw-dropping oil and gas

discovery was made in the pre-salt resource play off the coast of Rio de Janeiro and São Paulo.It served as a further testament to why Brazil was the natural venue in which to launch a fresh new Canadian publication de-signed to get an unprecedented inside view of the most promis-ing foreign markets for brave, bold Canadian entrepreneurs un-defined by geographical or political borders.No sooner than the product concept itself was initiated and the publishers at Slick International were getting a big international YES from the likes of Canadian companies interested in inter-national work, as well as countless Canadian government rep-resentatives at home and abroad who were eager to see more Canadians showcased. And especially on an international scale, for their entrepreneurial prowess globally, as well as their contri-butions to Canadian-enhanced trade efforts.Shortly after the Slick World editorial department decided the best cover story for a launch issue would be the man holding Canada’s top job in international trade, we tagged along to an opening of a trade office for a feature interview with Canadian International Trade Minister Stockwell Day in Recife, Brazil. There, Day would open the fifth of six trade offices in Brazil, further reinforcing Canada’s recognition of the true southern su-perpower Brazil appears destined to become in the near future.The pace at which the economic power of Brazil is moving is truly staggering – even for journalists who have witnessed the likes of the last Alberta boom.By all accounts, what has been found on- and off-shore Brazil amounts to the largest discoveries of oil and gas in recent history. It amounts to some 100 billion barrels of oil in a jurisdiction as politically stable as that of Canada’s oil sands, with a fraction of the price tag (economically and environmentally) attached to exploration.And for any appreciator of the histories of economies around

the planet, one can’t study the graceful rise of Brazil to be-coming a true international economic force without one

enemy (and therefore the need for military spending), without developing a deep love and admiration for this richly complex economic and cultural portrait that is the beautiful and elegant Brasil.It’s a hard place to leave. But before we do, join us in this first issue of Slick World as we meet up with Canadians doing business in Brazil currently, and some smart enough to start positioning themselves to do so. This issues also features key interviews with Minister Stockwell Day, and Petrobras’ top brass, Charles Labrunie, whose authentic admira-

tion for Canadians proved helpful at a recent oil

kathryn engel

From the Editor

Ran

dy

Vand

erve

en


show in Rio de Janeiro, where he allowed Slick World direct access through a mass of Brazilian cameramen and reporters to a lingering private exclusive interview for this edition. These days, Petrobras’s popularity is akin to football players and American rockstars in Brazil, and is seen as a source of greatly-needed development for many of the 190 million people here who remain in sadly deplorable living conditions.We’ll also catch up with the heads of both the Canadian/Brazilian Chamber and Export Devel-opment Canada, who unveil details of Canadian investment and opportunities in Brazil I trust you will find as fascinating as I did in conversation here in Rio recently.Meanwhile, back home, we will bring you a whole lineup of Western Canadian news from among the most experienced and varied journalists in the business, bringing you reports from Fort McMurray, B.C., Alberta and Saskatchewan. Read on for more. And fan alert, we are also thrilled to bring you a report right from the pit of CBC’s Dragons’ Den in each issue, beginning with a dialogue I had recent-ly back home with the ultimate marketing guru of the west, Arlene Dickinson, who I can gladly report has since become a new favourite personal source of inspiration. Sorry, Arlene, I’m blowing your cov-er. The CBC marketing team’s images of you belie the kind, gentle, thoughtful and compassionate encounter to which I was awarded in a recent con-versation.Welcome to the first of what will be monthly issues of Slick World Magazine. I can tell you everyone in-volved with every aspect of this product – from the publishing and editorial staff, contributing writers, designers, marketing, development and sales teams both in Canada, the U.S. and in South America, contributing bureau chiefs and the printing com-pany chosen because of its unparalleled pledge to quality – is 100 per cent committed to producing a resourceful and engaging publication we trust won’t soon end up in a recycling bin.We collectively aim to deliver the most comprehen-sive source of Western Canadian news surrounding one new foreign market in each month that will matter to our readers now, and in the future.It’s a Slick World out there, and we’re happy to have our readership along in its exploration. Get to know us, tell us about yourself and your entrepre-neurial passion – both at home and abroad – and always, keep in touch.

We intend for this magazine to be used as a resource of valuable information and, at the same time, help you connect with other businesses for the expansion of your excellence in service and product. Drop us a line and let us know how we can continue to augment our service to you as a reader and advertiser.

Kathryn Engeleditor, slickworld

Jeff

McC

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A T R A D I T I O N O F E X C E L L E N C E

experience the people

the technology the service


Erika SherkA graduate of Carleton University’s journalism program in Ottawa, Erika cut her teeth reporting in Canada’s North as a reporter and then business editor in Yellowknife, N.W.T. Tiring of iced eyelashes, she left for the Middle East, taking the role of news editor for Egypt Today and Business Today Egypt in Cairo. Returning to Canada, Erika’s splitting her time between business writing for Slick World and reporting in Iqaluit, NU.

Chelsea CookChelsea is a globetrotting photojour-nalist, whose passion for photography was born during journalism school. Her recent articles from abroad include pieces on Bali and Mexico. Chelsea also held a successful photo gallery show at PhotoSpace Gallery in Calgary.

James ChesterAfter studying Arabic in the UK, James

moved to Egypt and began his career

in journalism as an associate editor.

Moving on from Middle Eastern busi-

ness and energy news, he reported

community news in the UK and for

Northern News Services Ltd. in N.W.T.

Meet some of the journalists who helped bring this issue of Slick World to you.

Contributors


World news that matters to Western Canadians in business

Slick World Journal

‘Brazil’s time’Rio de Janeiro realizes Olympic-size dream

The Brazilian president known as the most current-

ly charmed world leader in the midst of a string of

good international news was granted his latest wish

when the International Olympic Committee (IOC) an-

nounced the city of Rio de Janeiro would play host to the

2016 Summer Olympic Games.

President Lulu (Luiz Inacio Lula da Silva) brought his pas-

sionate appeal to bring the Olympics to South America for

the first time.

“It is time to light the Olympic torch in a tropical country,”

Lulu told the IOC as it gathered in Copenhagen to select

a site for the 2016 Summer Olympics. “It is Brazil’s time.”

On Oct. 2, Rio de Janeiro won the bid at the expense of

Madrid, Tokyo and Chicago to become the first South

American city to host the Games.

No developing country has hosted the event since 1968 in

Mexico City, when hundreds of pro-democracy protestors

were massacred by Mexican soldiers.

Through its decision to give the nod to Rio, the IOC rec-

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ons


Olympic Games. The infrastructure

projects will receive 72 per cent of

the total budget, which was set at 14

billion USD – the highest among the

candidates.

The news follows a string of success for

Brazil, including ongoing announce-

ments of discoveries of amongst the

largest oil and gas reserves in the world,

already igniting an influx of interest in

foreign and domestic investment. Ex-

treme social inequities are starting to

decrease, and President Lulu says the

Olympics will strengthen his coun-

try’s overall gains in development.

“They say Brazil is a Third World coun-

try. Many say that. We need to im-

prove health and education,” he said.

“Yes, we have much work ahead of us.

But we are a huge country and receiv-

ing the Olympic Games will only help.

Respect is good, and today we received

it,” he said.

ognized the widely-held view that

Brazil’s current unique mix of success-

ful market economics and forward-

thinking social policies have made

it the only Latin American country

prepared and capable of hosting the

event.

President Lulu made a strong case sur-

rounding the fact Brazil is home to a

strong democracy and the only nation

among the world’s 10 largest econo-

mies never to have hosted the Olym-

pics.

“Rio de Janeiro presented the IOC with

a very strong technical bid, built upon

a vision of the Games being a celebra-

tion of the athletes and sport, as well

as providing the opportunity for the

city, region and country to deliver

their broader long-term aspirations

for the future,” said an excited IOC

President Jacques Rogge following

the announcement. “This call to ‘live

your passion’ clearly struck a chord

with my fellow members, and we now

look forward to seeing Rio de Janeiro

staging the first Olympic Games on

the continent of South America. Well

done, Rio!”

Despite the weight of the enormous

structural challenges of preparing for

the event, athletes will compete in

such emblematic venues as the Ma-

racanã soccer stadium – the largest

in South America – while rowers will

make their way through Rio’s blue wa-

ters beneath the outstretched arms of

the famous Christ the Redeemer stat-

ue overlooking the city.

“The Brazilians’ generous soul will

make the most extraordinary Olym-

pics the world has ever seen,” Presi-

dent Lulu said in his plea for the event.

Rio was widely regarded as the city

which most needed the infrastructure

improvements required to host the

Wik

imed

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omm

ons

slickworldonlinE.comslick world14


Layoffs loom for Saskatchewan potash giantSlumping grain prices, loss of China as market cited as factors

Potash Corp. of Saskatchewan, the world’s largest potash

producer, recently announced layoffs of 700 of its hourly

employees at its Lanigan and Rocanville mines and cut its

full-year profit forecast due to low potash prices.

The producer of fertilizer, industrial and animal feed products

whose main business focus is potash, says demand for potash

is down and it has been stockpiling inventory extensively await-

ing market upswings.

Potash Corp. cites this year’s absence of one of its main markets,

China, which it says would normally have accounted for a sig-

nificant amount of current production. Sales are also down, it

says, across the U.S.

Prices of the nutrient had exceeded a record $1,000 a ton in

some regions last fall, and collapsed to less than half of that

since, as farmers around the world cut purchases because of

slumping grain prices. The company already trimmed a 2010

forecast to 50 million from 55 million tons, and lowered its full-

year profit goal. For 2009, worldwide shipments will be down

around 40 per cent from last year, according to international

industry watchers. Analysts also say China is not expected to

start buying potash until early next year.

PCS says the layoffs are scheduled to take effect this month.

Challenge to tradition unveiledMuslim Canadian Congress calls for ban on the

wearing of traditional Muslim garments

The founder of the Muslim Canadian Congress tells Slick World the time is now to eradicate what he calls a medieval and misogynist tra-

dition that has no place in a modern society sup-portive of gender equality.Tarek Fatah spoke to Slick World from his Toronto office from which the call for a Canadian federal government ban on the wearing of traditional Mus-lim garments, including the burqa and the niqab, was put forward.

“This tribal custom has no place in Canadian soci-ety,” says Fatah, whose call for the ban follows a growing movement in places like France and Den-mark from high-level Muslim officials to have the tradition put to the test in modern-day society.

“It is a tradition that is being pushed on women by the Taliban and al Quaida through brainwashing of women about the evils of Western society and one that is sadly growing in popularity because of that brainwashing.”Fatah says there is nothing in the fundamental Is-lamic texts, including the Koran, calling for a cover-ing of the face.

“The only reason one would do so is as a way to dem-onstrate the thinking that, ‘The rest of the society is so satanic I have to cover my face in shame.’ I don’t understand why it can’t be understood that we are using our principals of Western civilization to help destroy it. It is our role as a congress to help protect and promote Muslim society and gender equality across our society.”Fatah says the call for the ban also addresses a huge security concern, citing specific bank robberies in North Carolina, Toronto and the United Kingdom by men dressed in burqas posing as women.The call for the ban immediately follows a monu-mental decision by Egypt’s top Islamic cleric, who announced students and teachers will not be al-lowed to wear niqabs in classrooms and dormito-ries of Sunni Islam’s premier institute of learning, al-Azhar in Cairo, as part of a larger government effort to curb radical Islamic practices.Sheik of al-Azhar Mohammed Sayyed Tantawi joined a growing voice of scholars across the inter-national community saying the veil is not required, but is merely a custom dating back to nomadic so-cieties living in the Arabian desert predating Islam when he publicly announced the niqab, “has noth-ing to do with Islam.”


The IEA says crude oil demand would reach 86.1 million

barrels a day in 2010, up 1.7 per cent from this year. That’s

an increase from IEA’s forecast from last month which

projected oil demand of 85.7 million barrels a day in 2010.The IEA points to brighter economic projections across the board, as reflected in the International Monetary Fund’s recent declaration that a global recovery has already been put in motion, in its expectation that the world demand for oil would average 86.05 million bpd next year.The IEA also bumped up estimates for the rest of 2009, saying demand in the fourth quarter would average 85.2 million bpd, 530,000 bpd more than expected last month and up from the 2009 low of 84.1 million bpd in the sec-ond quarter.

The IMF says world output will grow by 3.1 per cent in

IEA projecting improved economic growth Demand from developing countries spurs higher

oil and gas forecasts from international agency

The International Energy Agency, which watches and forecasts the global energy market and advises oil-consuming countries, says faster than expected eco-

nomic growth, in developing markets, will drive demand for oil faster than first believed.Demand for world oil, says the IEA, will grow in reflec-tion of that of the overall economy. In its monthly report, the Paris-based agency, which advises 28 industrialized economies, increased its global oil demand growth esti-mate for 2010 to 1.42 million barrels per day (bpd), up 150,000 bpd from its previous projection.Upon release of the IEA’s forecast, oil prices increased to $71.77 USD/barrel.


2010, more than the group had earlier

predicted, and that the growth will be

led by the world’s second-largest oil

consumer, China.

At the same time, new data from the

U.S. and Asia also point to great-

than-expected recovery rates, further

raising expectations for higher oil de-

mand, says the IEA.

Canadian economy showing signs of recoveryMore than 30,000 new jobs created;

interest rate holds steady – for now

Canada’s economy made some

impressive wins this fall, gain-

ing a surprising average of

close to 31,000 jobs in the month of

September alone, says Statistics Can-

ada (92,000 full-time gains, 61,000

part-time losses).

Driven largely by an overall increase

in full-time work, StatsCan says the

country’s economy is showing strong

signs of recovery from its first reces-

sion since the early 1990s.

The unemployment rate fell by 0.3

percentage points to 8.4 per cent – the

first monthly decline since the begin-ning of the labour market downturn in the fall of 2008.The increase in full-time work was mainly among youths and women aged 25 and over and in Ontario.

“Construction, manufacturing and educational services saw employment increases in September, while there were declines in transportation and warehousing,” says the federal agency.The report also found employment in the depressed manufacturing sec-tor increased by 26,000 in Septem-ber – the first marked increase since February 2009. Employment in con-struction rose in September by 25,000 and educational services saw a gain of 18,000 jobs.Upon the news for StatsCan, the loo-nie reached over 95 cents US, higher than it’s been in a year, and caused speculation about the possibility of it again reaching parity with the U.S. dollar, and what the overall good news meant for Canada’s interest rate.

“This bird can sing,” were the com-ments from Bank of Montreal econo-mist, Douglas Porter in his regular public morning note upon the news of the loonie’s strength.Economists across the country were quick to respond to the news of growth, saying the unexpected growth will give the Bank of Canada extra impe-tus to focus on the timing of interest rate increases in the future, especially considering the bank’s previous con-ditional commitment to hold interest rates at the current level until the sec-ond quarter of next year.The Reserve Bank of Australia became the first of the G20 nations to raise in-

terest rates since the onset of the reces-

sion – a sign of domestic confidence in

its economic future.

Australia also experienced an expect-

ed decrease in its unemployment rate

at the same time as that of Canada,

when local the local jobless rate fell to

5.7 per cent.

The Australian interest rate moved to

3.25 per cent from a 49-year low of

3.0 per cent and markets around the

world were boosted by the decision al-

most immediately.

Through a banking system which

shares that of Canada’s international

reputation for stability, coupled with

strong demand from China for Aus-

tralian iron ore and other minerals, as

well as a domestic stimulus package,

Australia weathered the worst global

downturn in decades better than oth-

er developed countries.

Meanwhile, the European Central

Bank recently announced a continued

hold on its benchmark interest rate at

a record-low 1.0 per cent.

slickworldonline.com

18 slick world

The Executive Reading LoungeLooking in on what’s at the front-and-centre of bookshelves

of the business set of Western Canada

In each issue of Slick World, editorial staff will be in-troducing you to readers from Western Canada who were moved by a great book and are inclined to share

it with their fellow business readers. Our intent is a celebration of books, as well as an intro-duction of our readers to their counterparts in a more intimate way. In each month, we will also be calling on our own Slick International (publishers of Slick World) broader staff for a brief word on their book of choice as well. To get us going, I thought I’d give a nod to my own book club and our most recent read, The Book of Negroes (I made a gargantuan faux pas by missing our last sacred monthly meeting while being absent in preparation for this issue of Slick World, one I hope to amend here). Law-rence Hill and his masterpiece will, at once, leave you beaming with pride to be a Canadian and will forever reframe your understanding of the history of African slavery in a way no textbook will. The Book of Negroes has made a last-ing contribution to Canadian fiction and lined itself up with the most important comments on the topic in existence and will make you shout out a huge, ‘Bravo!’Read on for this month’s recom-mendations, which I’m sure will inspire you as much as the fol-lowing accounts have inspired us here at Slick World.

Happy reading, KE


Howard CroneCEO of Cequence Energy, Calgary

The Wilbur Smith Series, Wilbur Smith

After a trip to South Africa a few years

ago, I really sank my teeth into the en-

tire series of 31 Wilbur Smith novels, I

couldn’t get enough!

I loved visiting the southern region of

Africa so much, and this whole collec-

tion of books just kept that alive for

me for long after.

I love the way Smith imposes his

characters directly into real historical

events. His books are largely focused

around two families, the Courtneys

and the Ballantynes, one is a military

family and one is a merchant family.

He wrote a complete series on both

and, at times, that series intertwine.

His writing is just so complex, he

writes forward from a historical point

all the way up until current events,

and then after writing about apart-

heid and events leading to current-

day Africa, he starts going back again

through history.

I love the way he injects character into

history – he includes Cecil Rhodes

in an entire series, who was also piv-

otal in diamond and gold mining and

deeply involved in the colonization by

the English of all of Southern Africa,

not just South Africa. So, for me, it is

just interesting to read about African

history in an engaging way.

I just find his writing captivating

and interesting about African history,

while still being great escapist reading

at the same time.

Crone’s Cequence Energy emerged in Au-gust of this year as the successor to the former Sabretooth Energy, which was re-capitalized in a reverse takeover and re-populated with Crone at the helm. Crone came out of retirement at the ripe old age of 46 after having been relatively idle since his Cequel Energy was merged with Progress Energy in a $1-billion deal in July 2004. Prior to Cequel, Crone was involved with the establishment of the highly-suc-cessful public energy companies, Cyries Energy and Cypress Energy. Cequence trades under the symbol CQE.

Now we’ve taken this ruminant de-

signed to eat grass and what you now

have are these animals in enormous

feedlots which never eat grass, and

they are sick and pumped full of peni-

cillin and antibiotics and fed to us.

I’m really in favour of globalization, I

think it’s crucial to open up the world

economy, but what I realize read-

ing this book is that that just doesn’t

work with food people eat. Even look-

ing at the organic industry, as soon as

you try to mass produce food, serious

problems are raised – everything from

soil quality to immigrant labour prob-

lems.

The book introduces you to a more

modern European view, and in Eu-

rope they drive around with bumper

stickers that read, ‘Eat Your View,’ and

now I understand what that means af-

ter reading this book. When I drive out

of town from my Vancouver home, I

love seeing the countryside and all the

small farms and the book challenges

you, if you love seeing that, you sim-

ply have to be more cognizant of your

food choices and support those farm-

ers.

Once you educate yourself on the

mass production of food and how that

translates to our society, you can either

try to ignore it, or change your habits.

My wife and I have three young sons

and we want to make smarter choices

that feel better, minor changes. We

just bought a lamb from a guy at our

farmers’ market – we know the guy,

he’s a great guy, and we know how he

feeds his animals and it just feels right.

I went fishing and caught 100 pounds

of salmon, and we’re trying to buy

more local fruit and produce.

Things just taste better grown more

locally and I feel better knowing I’m

making a better decision. I’d highly

recommend this book; it will change

the way you think about food.

Rudolf J. Kischer is a partner at the law firm of Maynard Kischer Stojicevic located in the trendy Yaletown District of Vancou-ver B.C. He practices in the area of busi-ness immigration and citizenship law.

Rudy KitcherVancouver immigration lawyer

The Omnivore’s Dilemma: A Natural

History of Four Meals, Michael Pollan

This is an absolutely fascinating ac-count from a journalist about the de-tails of where food comes from and the effect of the globalization of food on our lives.He dissects different types of meals and walks you through with a non-preachy, factual account of the pro-duction of each part of the meal.I learned so much about things like how the cheap production of corn, for example, is affecting our entire water systems and land quality in North America. Twenty five per cent of all products for sale in a supermarket contain corn in some way – we’re pro-ducing so much cheap corn pumped full of nitrates all derived from pet-rochemicals, and to read about what that is doing to our water and land is really shocking and unbelievable. That is also all connected to the pro-duction of meat – cows, for example.


There’s no dismissing the importance of having an ap-pearance at a WorldSkills Competition on a resume.

“Having competed in a WorldSkills Competition, these young professionals really have a global passport for the rest of their lives – they can work anywhere they want to,” said Richard Walker, president and CEO of WorldSkills Calgary 2009.The 40th WorldSkills Competition in Calgary, Alberta wrapped up with Olympic Games-like spirit after show-casing 900 of the best young skills, trade and technologies professionals going for gold.

Competition unites next generation of the world

chelsea cook

Calgary WorldSkills

This major international competition inspired the next generation to broaden the view of their profession and career options, and also expanded some adults’ under-standing of different working techniques. Competitors ages 17 to 22 from more than 50 World-Skills International member countries spanning six of the world’s continents worked alone or in teams to com-plete time-limited challenging projects over four days.International delegates viewed the 45 different skills categories that were part of the competition. The events covered a broad spectrum of careers including cooking,

Turkish competitor Kumru Kodamanoglu puts the finishing touches on

her handcrafted, originally designed wedding gown during the final

hours of the competition.


hairdressing, dressmaking as well as welding, machining, manufacturing and engineering technology. Slick World asked contributing writer Chelsea Cook to take in the final day of the competition and provide our readers with a snapshot of some of the activity and individuals involved.

Fashion TechnologyOne of the more amazing performanc-es at the competition was turned in by 2009 gold medalist Carol Sidler from Switzerland. She designed and hand-crafted a wedding gown made of ivory and champagne pink fabric gathered on the skirt by hand-made roses in four days. A Swiss onlooker and fan from Sidler’s home country, Ruth Schweizer says,

“(Sidler) apprenticed 3,000 hours to compete in the competition, 1,500

of which took place on her own time.

The dress is gorgeous and it’s entirely

her own design.”

Japanese competitor Miki Chiba said

sewing is her favourite part of the skill.

She said, “fashion technology is all

about creativity and I am giving it 100

per cent of my effort.”

All wedding dresses made by 14 young

fashion designers were “designed for

the cure” says Brenda Speirs-Fryatt,

Fashion Technology workshop super-

visor, and donated for auction with

proceeds going to cancer research for

the Canadian Cancer Society.

CNC MillingCNC Milling involves cutting metal

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Can

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(TOP) Samuel Chabot of Quebec earned a Me-

dallion of Excellence in the men’s hairdressing

competition, as did Dan Van Holst of Waterloo,

Ontario (RIGHT).


materials with computer numerically

controlled (CNC) milling machines.

The team from Germany included an

expert and a competitor, who worked

hard day and night to complete the

competition.

Trainer Herbert Mattes, head of the

Chiron training centre in Germany for

CNC Milling that has about 100 stu-

dents in different trades, proudly said

“this is a great experience for me.”

Mattes, who was attending his third

WorldSkills competition, worked fe-

verishly in the evening making the

program and drawings for CNC Mill-

ing German competitor Andreas See-

burger to complete.

After nearly three hours designing the

program, he was machining with great

fervour on the final day of competi-

tion.

“It can take up to six hours to complete

one piece,” says Mattes with respect to

manufacturing parts on the machine.

The hard work didn’t result in a gold

medal, but a respectable eight-place

result.

In total, four pieces were required to

be made for this competition. Tools,

offsets and clamps were manufac-

tured; some parts were made for car

manufacturers such as Hyundai by

the Korean team.

WeldingThe welding challenge utilized pres-sure testing to see if the vessels com-petitors made were watertight. Team Sweden was the last to compete, using water in the welding technique used to assemble the vessel. The team was fiercely trying to make a vessel that tested to be leak-proof.

When asked if the Swedish family waving their flags was nervous for the team Adam Carlsson said, “I am very nervous for my country right now. I hope this vessel will not leak.” True to form, their final vessel tested to be a success. Team Sweden mem-bers rejoiced as the judge shook their hands and the expert was proud of their work, and shook hands with the Swedish family, who also exchanged Swedish niceties, while cheering their home team on with flags.Although the team did not garner a medal, Swedish team members were

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LEFT: CNC Milling competitor Andreas See-

burger, (right) from Germany works alongside

competitor Danilo Silva, (left) from Brazil on

the milling machines that create tools, offsets,

and clamps on machines. RIGHT: Mark-Olivi-

er Bélanger of Mirabel, Quebec won a Medal-

lion of Excellence for his efforts in the welding

competition.


proud of their work and cranked out

20 vessels over the course of the weld-

ing competition.

ManufacturingTeam ChallengeA generator was made for a hand-

crafted exercise machine that had to

be able to hold power for five minutes

in length. The challenge theme was

renewable energy and sustainability

with power generation.

Testing the project employed move-

ments by a swim team on exercise

equipment – a spectacle that drew a

packed audience.

Notably, this was the first WorldSkills

Competition to focus on a sustainable

design and to conduct an environmen-

tal audit.


Team Sweden completes Welding skills competition building a vessel with a welding technique

using water from a program made by Competitor, Karl Johansson, and with the help of Dhafer

Tanazefti, from Tunisia.

GoliathWon’t BeStopped

slickworldonlinE.com24 slick world

These days, the Town of Fort McMurray reaches

much farther than its city limits. Executives

in Calgary and families in Newfoundland

alike have come to depend on the oil sands depos-

its around the town for their livelihoods. Environ-

mental activists denounce the operators of the oil

sands as climate criminals.

In the frenzied debate, there is often little room for

the business story of the oil sands.

The recession of the past year has not hit the indus-

try as hard as some people might have thought it

would, but it has certainly had an impact.

“We’ve had to revise figures on a number of differ-

ent options but we’re still pretty confident in the oil

sands,” says Tim Markle, public affairs officer at the

provincial government’s Alberta Energy.

Oil sands spending over the next 11 years, reports

the Canadian Energy Research Institute (CERI),

will be “modest.”

Nevertheless, IHS Cambridge Energy Research As-

sociates (IHS CERA) says world oil demand will re-

bound from a low of 83.8 million barrels per day

(bpd) this year to its 2007 high of 86.5 million bpd

by 2012. And developers of the second largest de-

posits after Saudi Arabia’s oilfields are ready for the

resurgence.

james chester


Jam

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Perspectives on the RecessionTalking to most oil companies and industry represen-tatives, it’s hard to believe the downturn ever hit the industry at all.Don Thompson is president of the Oil Sands Develop-ers Group (OSDG), which represents 26 oil sands op-erators.

“For projects that are up and running, the effect of fall-ing crude oil prices has been very minimal,” he says.

“The way you approach operations in a high crude price and in a low crude price is exactly the same. You want to maximize your production, so the fall-ing crude oil price has not impacted operating work-forces and operating plants and projects in the region. If anything, it’s refocused them on the need to be safe, reliable, productive and efficient every day.”Suncor, which operates the first oil sands project that was started in 1967, lowered its costs per barrel by increasing production. In the second quarter of 2009, it cost Suncor $31.30 Cdn to produce a barrel of crude oil. In the second quarter of 2008 it cost $50.85.But a look at the bottom line tells a different story. Despite increased production and cheaper energy in-put prices, Suncor still had a net loss in the second quarter this year of $51 million. This time last year, the company brought in $829 million. Maintenance at the other big oil sands player, Syn-crude, caused a drop in production that brought the cost of producing a barrel of crude in the second quar-ter to $50.23, up from $41.92 a year before. The Ca-nadian Oil Sands Trust, which owns 36.74 per cent of Syncrude, reported a net income of $46 million in the second quarter, compared to $497 in the same period in 2008. While operations continued, many projects in the planning or construction phases, such as Suncor’s Voyageur upgrader and Firebag mine expansion, were put on hold. The number of workers in construction camps fell over the past year from 27,000 to 20,000, according to the OSDG. In its study released July 2009, Economic Impacts of the Petroleum Industry in Canada, CERI reports, “the CERI 2009 Economic Slowdown Projection indicates that $218 billion will be invested in the oil sands for new production (from 2009 to 2020). This is $97 billion less … than previously projected under the CERI Ref-erence Case Projection (2008).”Yet companies such as Shell, Connacher, Devon and Imperial have continued to develop and expand and there has been no change in the numbers of operat-ing and maintenance staff.

Don Thompson, president of the Oil Sands Developers Group,

says falling crude prices have prompted oil sands operators to

refocus and become even more efficient.

in indoor and outdoor sports, featuring Arctic Sports and Dene Games.

the music, food, fashion, arts and cultures of their

Winter Games.

Explore the history of the Arctic Winter Games with thisunique exhibition by the Alaska State Museum. Hundreds of historical Games items including team uniforms, posters and over 1,000 Arctic Winter Games pins.

For more information on visiting the Grande Prairie region:Call 1-866-202-2202 or visit www.gptourism.ca


News of Suncor’s merger with Petro-

Canada, creating Canada’s largest en-

ergy company, U.S. approval of the

Enbridge ‘Clipper’ pipeline from Al-

berta to Wisconsin, and the $1.9-bil-

lion PetroChina investment in 60 per

cent of Athabasca Oil Sands Corp., has

given the impression that oil sands is

a sound investment. And although

the figures look bad, for existing op-

erations at oil sands facilities around

Fort McMurray, it’s business as usual.

Cheryl Robb, a spokeswoman at Syn-

crude, states “we (produce) oil wheth-

er it’s $30 a barrel or $140 a barrel.”

“We’re still seeing production grow

from projects that are underway in

Fort McMurray even during this pe-

riod of what has been relatively low

prices,” adds Greg Stringham, vice-

president of oil sands and markets at

the Canadian Association of Petro-

leum Producers (CAPP).

“And that momentum is very typical of

the oil sands,” he says. “It takes six or

seven years to put a project into place,

and so if there is a downturn, it takes a

long time to slow them down.”

Oil Sands OptimismAlberta’s oil sands are found in three de-

posit regions – Cold Lake, Peace River

and Athabasca. Fort McMurray is in the

Athabasca deposit region, which con-

tains 80 per cent of the oil sands reserves

and is the only place where the oil is

close enough to the surface to be mined.

Currently the 12 operating oil sands fa-

cilities in the Athabasca deposit region

produce 1.175 billion barrels of bitumen

per day, 835,000 bpd of which is up-

graded – from bitumen to crude oil – in

Alberta.

Six facilities are under construction in the

Athabasca region and all will be produc-

ing by 2011, according to the OSDG. The

biggest project currently under construc-

tion is Imperial’s recently-announced Ke-

It’s full speed ahead for oilsands operators in the Fort McMurray area, who

are banking on an eventual turnaround in the demand for oil on the world

stage and, as a result, a rebound in crude prices.


arl Lake mine, with a capacity of 300,000

bpd – rivalling Suncor’s and Syncrude’s

350,000 bpd facilities. The first phase of

Kearl will be operational by 2012, with

two phases to follow.

In total, projects in the pipeline or under

construction around Fort McMurray will

be producing over 1.4 billion bpd by 2018.

And with a rising oil price, those projects

are looking a lot more appealing to inves-

tors.

“It’s fair to say that the pace of growth is slow-

er but, in reality, this year there’ll be $7-8

billion in this region spent on new growth

and … there’s $18 billion a year spent on

operating the existing plants (in the Atha-

basca deposit region),” says Thompson.

“That’s a lot of money in a small area.”

Investors and workers have good reason

to be confident, even after the last year’s fi-

nancial results. Oil sands deposits produce

around half of Canada’s oil output but rep-

resent 97 per cent of the country’s reserves.

And the 170 billion barrels recoverable by

today’s methods represents only 10 per

cent of the total.

Allan Fenerty, a workforce development

instructor at the Suncor Energy Indus-

trial Campus of Keyano College in Fort

McMurray, has been teaching oil sands

operatives for 20 years.

“Any of the slowdowns that I’ve seen

have only typically ever lasted maybe a

year and a half, two years max,” he said.

“There’s only so much oil to go around.

The world needs it because we’re just too

dependent on it for too many things …

the resources are here, it’s just a matter of

getting to them.”

The In Situ SolutionThe apparently crude methods – big

trucks, big holes and tailings ponds of

oily waste – belie the industry’s tech-

nical complexity. Efficiency has been

the main aim of the industry’s drive

to develop new technologies. Conven-

tional drilling yields oil that can go di-

Edmonton

Calgary

Cold Lake

Fort McMurrayPeace River

Of the three oilsands deposit regions in Alberta, the Athabasca region

contains 80 per cent of the oil sands reserves.

Jam

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rect to a refinery. Product from the oil sands has to be carried from a mine to an upgrader, which processes the bitumen into crude oil before it can be refined into a useable product.The process, therefore, is very costly. However, another factor has guided technological development – 80 per cent of the deposits are too deep to be mined. The bitumen below 75 metres therefore needs to be extracted ‘in situ’

– that is, without trucks and shovels. The process is generally less expensive but yields less. The largest project un-der construction, EnCana’s Christina Lake, will cost $1.4 billion and pro-duce 40,000 bpd while the first phase alone of Imperial’s 300,000 bpd Kearl mine will cost $8 billion.Michael Burt is the vice-president and managing director of the In Situ Oil Sands Alliance (IOSA). The IOSA, formed just over a year and a half ago, represents exclusively in situ produc-ers.

“It’s almost identical to a conventional oil field in that there are small well-heads out in the landscape,” he says. The most well-used in situ technol-ogy is steam-assisted gravity drainage (SAGD), which was first used around 20 years ago. The SAGD horizontal well pairs are drilled about five me-tres apart. The process involves the injection of steam into the ground. The steam melts the bitumen deposit, which can then be pumped out and upgraded. Other technologies use electricity, solvent injection or com-bustion (as in the process known as toe-to-heel air injection) to extract oil. These methods all have the advantage of producing oil that needs much less upgrading, as part of the process is done underground. They also cause very little immediate damage to the ecosystem above ground.

“Most of the technology that’s going to be used in the future, and is growing quite rapidly every year, is going to be this in situ technology,” says Burt.

“The number one issue for us is terres-trial disturbance. We’re several orders of magnitude smaller than a mine when it comes to the amount of sur-

face land that we disturb.“But in situ does have its Achilles’ heel: Because we typically are using steam to heat the reservoir, we use large amounts of natural gas so we can have sometimes a higher carbon footprint on a per-barrel basis than the mines,” he says.

“The development of steam-assisted gravity drainage and horizontal drill-ing and all of its variants … was just a game-changing nature for the indus-try,” says Stringham. “Not only does it open up the in situ resources that re-ally had been stranded before, but it opened up the investment in the oil sands to not just the big companies.”Currently in the Athabasca deposit region, seven out of 12 projects are in situ (including the Suncor Base Plant, which uses both mining and in situ). Five out of seven projects under con-struction are in situ projects. Most of these are found to the south of Fort McMurray.

“You have a lot of small independent in situ developers because capital is not as intensive for these projects to get your first phase up and running,” says Burt.

“To develop these mines, typically, you need to have very deep pockets be-cause the up-front capital expenditure is so high. That’s why there are lots and lots of in situ developers,” he said.

“I’ve been in the business a long time and I don’t even know all of them.”

Technology by NecessityOwing to the relative novelty of the methods and its low impact visually, in situ technology focuses on higher production as well as lower energy input. However, mining has become much more concerned with environ-mental impact.Tailings ponds are one of the most damaging elements of the mining pro-cess. The ponds contain waste from the upgrading process suspended in

New technology has opened up in situ re-

source plays that previously were stranded,

and has allowed some of the smaller players

to get into the oil sands market.

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water and represent an environmental and public relations disaster. In April last year, approximately 1,600 ducks died when they landed on Syncrude’s tailings pond north of Fort McMur-ray. The company pleaded not guilty to federal and provincial government charges of causing the deaths. The case will go to trial in Edmonton in March.The Alberta Energy Resources Conser-vation Board (ERCB) provided extra impetus to a cleanup with a directive in February. The legislation requires mining companies to reduce fluid tail-ings, store them in ERCB-approved areas and convert them to trafficable (dry) tailings. In response, mines are testing a range of technologies that cause the tailings to settle faster, or that quickly separate the tailings from water, such as centri-fuge. Shell is just one company that is investing – the company spent $100

million on a pilot plant at its Muskeg River project to try out the trafficable tailings technology.But the biggest challenge both min-ing and in situ projects face is how to deal with future emissions legislation. In 2007, Alberta was the first North American jurisdiction to introduce emissions intensity regulations, limit-ing the emissions per unit of economic activity. Companies emitting more than 100,000 tonnes of greenhouse gases had to reduce their emissions intensity by 12 per cent, or pay $15 per extra tonne of greenhouse gases (measured as carbon dioxide equivalent, the gas’s damaging effect compared to CO

2) into a technology fund. They can also invest in an offset project. The scheme does not include a cap on overall emissions.

“Companies have to be well aware of the fact that advances in technology

and advances in new scientific find-

ings (mean) Alberta will adapt accord-

ingly to ensure that environmental

needs meet the newer standards,” says

Markle.

“The industry is being pushed by leg-

islation on environmental impacts

that is forcing the oil sands industry

to test new realms of technology that

are very expensive to find and devel-

op,” says Fenerty. “A lot of the people

that are really concerned about the en-

vironment don’t have a hope of find-

ing that technology because they don’t

have the resources to even come near

achieving it.”

The industry challenge now is the UN

Climate Change Conference in Copen-

hagen in December. The conference

aims to broker a deal for a successor

to the Kyoto Protocol. Both provincial

government and industry are antici-

pating a federal climate strategy that

Different technologies offer options for

extracting oil from raw bitumen (inset).

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I guess that’s a choice they can make,”

says Thompson, “but it will be a signifi-

cant strain, I think, to deal with oner-

ous carbon legislation.”

Environment versus EconomySyncrude is not waiting for the results

of the conference to implement its

$1.6-billion project to reduce sulphur

dioxide emissions by 60 per cent at its

site near Fort McMurray.

The PR battle is also underway. The

OSDG, IOSA, CAPP and individual

companies consider it their respon-

sibility to, as they see it, balance the

debate.

“We haven’t maybe done as good a

job as we can at informing the public

about what measures we have in place

to mitigate our environmental im-

pact,” says Robb.

The environmental damage must be

juxtaposed with the economic benefit.

Canada supplies 19 per cent of the oil

imported to the U.S., making it the

United States’ biggest foreign supplier

of oil.

Mining and in situ processes are un-

disputedly more polluting than other

sources of oil. According to IHS CERA,

the production of crude from oil sands

emits 30 to 70 per cent more pollution

than oil from conventional sources.

However, CERI projects the oil sands

will directly, and indirectly, contrib-

ute $1.7 trillion to the Canadian GDP

over the next 25 years.

“As long as there’s a world thirst for oil,

people know it’s here and one great

thing about the oil sands is you don’t

have to explore for it,” says Markle.

The industry has ploughed through

low pricing, technological hurdles

and some very bad PR to emerge as a

cornerstone of the Canadian economy.

With demand on the increase again,

the world will have to get used to un-

conventional oil.


Heavy equipment doesn’t sit longer than a

few days - just long enough to perform routine

maintenance, as some of Fort McMurray’s oil

sands projects continue to move forward.

could be damaging to the business of

producing ‘unconventional’ oil.

The companies “have proven they can

cope and deal with legislation which

they know and understand,” says String-

ham. “The biggest difficulty is defining

what that legislation is and what it’s go-

ing to be over the next decade.”

“Capping emissions means capping

growth and capping production in the

oil sands and if society wants to do that,

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james chester

In most parts of the world, a re-

cession is a bad thing. But in Fort

McMurray and the municipality of

Wood Buffalo, where the population

grew by 141.2 per cent from 1999 to

2008, the downturn was a relief.

Wood Buffalo is an area under a lot

of pressure. The municipal census of

2008 counted 103,334 residents in

Fort McMurray and surrounding ar-

eas. Infrastructure creaked under the

weight of 10.5 per cent average annual

population growth. Businesses have

struggled to access the land they need

to expand. The downturn, many say,

has given Fort McMurray time to pre-

pare for the next wave of the oil rush.

“We had our issues long before the

recession ever came along,” says Jack

Bonville, president of the Fort McMur-

ray Chamber of Commerce. “We were

growing really fast and that created a

lot of issues infrastructure-wise for the

community.”

“When the recession actually came,” he

says, “it was almost like a break.”

Sales, says Jason Vargo, general sales

manager at Alberta Motor Products,

“went from completely insane to back

to normal.”

The Regional Municipality of Wood

Buffalo calculates that from 2002 to

2005, the growth of Fort McMurray

accounted for 92 per cent of growth.

The work camps at oil sands proj-

ects accounted for the other eight per

cent. From 2005 to 2008, however,

the camps accounted for 53 per cent

and the town for only 35 per cent of

growth.

And this is where the recession hit

hardest. The census reported the num-

ber of workers in project camps in-

creased by 7,712 from 2007 to 2008.

Yet with many projects put on hold,

around 7,000 contract workers found

themselves out of work in 2009, ac-

cording to the Oil Sands Developers

Group (OSDG) in Fort McMurray.

“In this region you have two separate

workforces,” says Jeff Penney, manag-

er of economic development at the Re-

gional Municipality of Wood Buffalo.

Contract workers suffered, but as op-

erations on existing oil sands projects

continued, the majority of business

was not adversely affected.

“From an internal standpoint for oper-

ational staff, it was basically business

as usual,” he says. “And that’s the peo-

ple who typically support the business

community in this region. The retail

sector, the restaurants … those guys

The Boom Echoes, Still

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still had this big operational staff that

needed support.”

Keyano College’s Trades and Heavy

Industrial Division in Fort McMurray

specializes in operations and mainte-

nance training, so officials there are

not sucked into the peaks and troughs

of the construction market.

“There has been a hesitancy to attend

technical training … with some un-

certainty of employment afterwards,”

says Glenn van’t Wout, dean of the

Trades and Heavy Industrial Division

at Keyano College. “However, if it hap-

pens to be one of those job families

that is not affected by the construction

cycles (such as engineering) then we

have, if anything, noticed an increase

in attendance of technical training.”

The downturn in the construction sec-

tor has also provided some benefit to

the community. Alberta Finance and

Enterprise’s Alberta Economic Outlook:

First Quarter Update 2009-2010, re-

leased August 2009, reported: “Non-

residential construction costs were

down 6.3 per cent in the first half of

2009 compared with the same period

in 2008.”

Lower construction costs mean infra-

structure improvements cost the provin-

cial government and municipality less.

“We are starting to see costs coming down and this will allow us to stretch our investment dollars,” says Heather Kaszuba, spokeswoman for Alberta Transportation.A new five-lane bridge over the Atha-basca River will cost $127 million and is scheduled to open in 2011. Work on a bridge at the Thickwood Boulevard and Confederation Way interchange began in fall 2008 and the second phase is due to begin this fall.The province also plans to twin High-way 63 south from Fort McMurray to the junction of Highway 55, a project Kaszuba stated will cost more than $1 billion. Sixteen kilometres to the south of the city and 17 kilometres of twinning between the Suncor and Syncrude oil sands projects have al-ready been completed. Last year, Sun-cor paid for the construction of the $55-million interchange linking its base plant and upgrader to Highway 63.The rapid growth due to the oil sands industry has brought its own challeng-es to Fort McMurray.

“It’s great that there are so many op-portunities from a career standpoint but people want to be able to raise their kids, they want to have the types of services that you should have in a

community of this size,” says Penney.The price of housing and leases dur-ing the boom period of the last decade have made doing business in Wood Buffalo very expensive, but the major barrier for businesses looking to set up shop in Fort McMurray is access to land. The Chamber of Commerce is also lobbying for more commercial access to Crown land, says Bonville.

“We have a significant deficiency in commercial land right now and until we make some progress on alleviating that deficiency, it’s going to be difficult not only to attract new business but to encourage local business to expand,” says Penney. With the announcement of new proj-ects – the biggest being Imperial Oil’s Kearl Lake – the oil sands industry threatens to drag the region’s busi-nesses into another period of growth, albeit not as “insane” as the boom of the $147-barrel in 2008. Residents might have enjoyed the downturn, but in Fort McMurray, says Bonville, “ev-erybody that’s here is here to service the oil sands industry.”

“As oil sands moves forward,” says Pen-ney, “the community moves forward.”

www.slickworldonline.com

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Glenn van’t Wout of Keyano College in Fort McMurray has witnessed an increase in

attendance for certain types of technical training, such as engineering.


INTO


It has a history of surprising the international business community, Brazil does.When the wildly-popular Luiz Inácio Lula da Silva, or Lulu, first came to

power seven years ago after years of serving in opposition, international inves-tors fled the country en masse, fearing his calls for social-economic reforms.Since then, Brazil’s Bovespa, the São Paulo-based and largest stock market in Latin America, gained some 1,100 per cent more than the American S&P 500, which includes large publicly held companies that trade on either of the two largest stock markets, (NYSE Euronext and the NASDAQ OMX) did in the same time period.While the rest of the global marketplace continued to linger in the wake of its collapse, the Bovespa grew and grew, increasing 180 per cent since last Novem-ber alone.The more fearful of the international investment community have been watch-ing and waiting, expecting that such sweltering of a classic emerging market must surely overheat. But the greater the anticipation for a breakdown takes hold, the more Brazil continues to show up economically, again and again.But increasingly, as the weeks and months progress, the international commu-nity is taking notice.Just at press time, one of Europe’s largest banks raised more than $8 billion from the listing of its Brazilian subsidiary in the world’s largest initial public offering this year in a string of financially astounding recent events that has the international community turned on its ear.Canada, notwithstanding. With an untouchable reputation across South Amer-ica for its great overall business model, one of the world’s most stable banking systems, a particularly-stellar name in leading oil and gas technology, and a supportive political environment to foster trade on both sides, Canada’s time is ripe entrepreneurially in Brazil. As International Trade Minister Stockwell Day says, Canadians can’t afford to not explore their options in foreign markets such as Brazil.In the pages ahead, join Slick World editor Kathryn Engel, who visited Brazil twice for the preparation of this issue, and discovered first-hand how every-thing from garnering the first hosting of the Olympic Games ever held in South America, to its constant string of announcements over increasingly plentiful resources all help equate in the possibility that Brazil may just go right on sur-prising the entire world, true to form.

BRAZIL

slickworldonlinE.com38 slick world

South American juggernaut seen as a land of opportunity

Brazil Beckons forCanadian Business

When New York’s Goldman Sachs Group, Inc. coined the BRIC acronym referring to the world’s fastest-growing developing economies

of Brazil, Russia, India and China in 2001, the theory was that at their then-current rates of growth, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world.Fast-forward to what has transpired in Brazil since that time, and economists worldwide now say that not only has Brazil stepped up to its leading role in the company of BRIC, but that developments over the last two years in the country have positioned it as at least the future super-power of the south.The World Economic Forum reports Brazil was the top country in what it calls the upward evolution of competi-tiveness in 2009, gaining eight positions among other countries, overcoming Russia for the first time, and par-tially closing the competitiveness gap with India and Chi-na among those BRIC economies. Dramatic new oil and gas discoveries located beneath a shifting layer of salt under the sea bed in what is now be-ing called the pre-salt, or sub-salt, region contain at least eight billion barrels of oil in the prime area alone. Even

with local rules calling for the state-controlled Petrobras to have the largest role, international exploration compa-nies from every corner of the globe are already eyeing up the possibilities in what is said to be the main deacon of possibility in an ongoing world oil and gas slump. Add to that an excellent relationship with hundreds of trading partners, and a service sector that leads its GDP (67 per cent), strength in industrial service and manufac-turing, agriculture, and mining, wherein Canada plays an integral role, and the reasons are evident why the Cana-dian government has made Brazil among its key focuses.Canada’s International Trade Minister Stockwell Day tells Slick World, the only Canadian media outlet at the recent opening of a new trade office in Recife, Brazil, that the country represents one of the strongest opportunities in the world for Canadian companies eager to expand into the foreign marketplace, and one Canada sees as one of its most important allies.

“The Americas are important, the hemisphere we share, we need to let them know we are here and that there are ad-vantages of dealing with a stable government like Canada whose banking system has been acknowledged as the most stable banking system in the world,” says Day. “And because of our policies, the IMF (International Monetary

An aggressive approach to oil and gas exploration – both on-shore and

off-shore – over the next few years in Brazil will have many foreign compa-

nies looking to tap into the marketplace, and International Trade Minister

Stockwell Day says Canadian companies should step up and take a close

look at some of those opportunities.

kathryn engel


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(Our) Canada-U.S. trade relation-

ship is the largest trade relationship

between two countries in the world

and it is the most historically-suc-

cessful one. But, what we’re finding

in an economic downturn (is) when

America loses its buying power, if

all your business eggs were in that

basket, you’ll be in trouble, you

won’t be able to make omelettes.

So what we’re saying, is, you can’t

afford not to check out the other

opportunities around the world…

~ Stockwell DayCanada’s International Trade Minister


Fund), and the World Economic Fo-rum, and the World Bank have all said Canada was one of the best prepared going into this downturn and will be one of the first coming out, and I

believe that is because of our policies we’ve put in place – competitive taxa-tion (and a) common-sense regulatory regime. I believe we have a good blend of policies – along with, in part, be-cause of our climate we have learned what it means to develop environ-mental technologies, energy-saving technologies, which is a great fit for a nation like Brazil.”It is in some current key areas, includ-ing oil and gas, Day feels that natural fit

will really start to shine. Petrobras has stated its capital budget between now

and 2013 will rise to $174 billion USD to, in large part, develop its on- and off-shore massive reserves, and that it will look to expertise and experience from elsewhere. Canada has already established itself as being home to one

of the most technologically-advanced industries on the planet. Couple that with the current eagerness for some Alberta companies to look elsewhere for oil and gas opportunities, and Day

says a perfect match exists.“Alberta companies, workers, have de-veloped some amazing technologies when it comes to oil and gas – and Brazil has also developed some strik-ing technologies. Right now Alberta, of course, is working on its own roy-alty process and I won’t speak directly to that but the Alberta oil and gas has been, and continues to be, a world leader. Technologies that have been developed in Alberta surrounding

(factors like) climate, terrain, pipeline, storage, rejuvenation of wells, drilling,

Alberta has done it all and will con-tinue to do that.”To inspire Canadian trade with Brazil, Day’s department has stepped up its efforts significantly.

“The investment story here in Brazil is

very good, we’ve got a Brazil plan, we want to see bilateral trade double by 2012,” says Day, who met with Edu-ardo Henrique Accioly Campos, Gov-ernor of Pernambuco – a northeastern

state currently undergoing a develop-ment boom – and with representatives of the region’s business community to discuss enhanced co-operation in the areas of agriculture, energy and sci-ence and technology.

“We want our commercial relation-ship to keep growing, and that’s why we’ve opened two new trade offices here,” says Day. “Canadian companies have proven to be world leaders, and their products are in high demand in

key sectors in Brazil. Our government wants to help them to seize the oppor-

tunities.”With the new Canadian trade office in Recife, followed by an additional one opened recently in Port Alegro, the to-tal number of Canadian official pres-ences in the country rises to six – more

Canada’s International Trade Minister Stockwell

Day meets with Eduardo Henrique Accioly Cam-

pos, Governor of Pernambuco, during the open-

ing of a new trade office in Recife, Brazil.

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Title Space is HereTitle Space is Here

than any other countries around the world except India and the U.S. It’s indicative of what Day calls a climate filled with opportunities for forward-thinking entrepreneurs.

“Accumulated investment from Brazil into Canada has, over the last several years, come out to $11 billion, and the other way around about $9 billion Ca-nadian investment in Brazil.“In 2008, Canadian exports to Brazil totalled $2.6 billion – a 70 per cent increase over the previous year. Key exports to Brazil include fertilizers, mineral fuels and oils, salt, sulphur, cement, machinery, paper and paper-board.Day says President Luiz Inácio Lula da Silva’s (Lulu) economic reforms, cou-pled with Canada’s increasing reputa-tion as home to among the most stable banking systems in the world, have

led to an enhanced willingness on both sides to seek further opportuni-ties for investment.

“President Lulu has followed economic reforms that were put in place 10 to 15 years ago – economic reforms put in place to see increased prosperity – to create a level playing field for work-ers and investors ... common-sense tactics, regulatory regime, predictable investment rules so people know their investments are going to be stable in terms of the laws of the land and they are the fourth largest democracy in the world, so all of that under Lulu’s leadership has led to continued eco-nomic growth.”Canada’s role, says Day, is to clear a path for savvy Canadians towards the opportunities.

“Our perspective, as a government policy, is make trade opportunities

and business opportunities as ob-

stacle-free as possible for Canadian

workers, entrepreneurs, investors and

producers. That’s the job of govern-

ment. That’s why we will aggressively

pursue, if not free-trade agreements,

we’ll pursue foreign investment pro-

tection agreements, science and tech-

nology and blue-sky agreements. That

is why it is our policy to keep our taxes

as low as possible – and as you know

(Brazil is) the most competitive of the

G8 right now. The regulatory regime

should be common sense and not

overly burdensome. It is government’s

job to have all those things in place so

The opening of two new trade offices in Brazil,

including this one in Recife in northern Brazil,

will only serve to enhance opportunities for

Canadian entrepreneurs, says International

Trade Minister Stockwell Day.

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ABOVE: The Petrobras “P5” off-shore drilling rig is getting geared up for

production. RIGHT: Brazilian President Lula da Silva has played a key

role in allowing a democratic system to thrive in Brazil.

then our businesspeople, workers and producers will make

the decisions on where they want to go. It is our job to make

it obstacle-free and open the doors. So that’s why we strike

agreements with a country like Brazil which is a very strong

economy – fifth largest country in the world, 190 million

people, but within that the middle class is estimated around

45 million, so the market opportunities based on a

good historical relationship are abundant.”

And while the extended international com-

munity has its eye on Brazil right now, Day

says the Canadian business community ...

has some inherent advantages amid the

prospects.

“The natural things in common we share –

oil and gas, agriculture, machinery – four types of applications, communications

and technologies, we buy a lot of inorganic chemicals from

Brazil – there are so many natural commonalities (and) we

try to enhance those through government policy. And Bra-

zil, to its credit, is a fairly recent full-out democracy in the

last 20 years. We really congratulate the government and

people of Brazil for maintaining democratic policies that

respect hard work and allow people to enjoy the fruits of

their labour.”

And when it comes to working with Petrobras, the state-

controlled oil and gas giant, Day says the concept is not one

that throws Canadians off when doing business.

“One of the things investors find in Canada – we have some

Canadian history of strong government involvement in

business – which I don’t advocate – but Canadian business

people have had to deal with that. (Things like) PetroCa-

nada, we have an airline that used to be pretty well nation-

alized, so Canadians have had to learn to adapt to that, but

they also see the benefits of getting out of business.”

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MAIN IMAGE: Seashore and port infrastructure at Sao

Francisco do Sul, Brazil. TOP INSET: Sea-going con-

tainer ships like this connect Canadian industries to

world markets. BOTTOM INSET: Stockwell Day goes

on a tour of the Port of Suape in Recife, Brazil. Gov

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The global recession, adds Day, has actually provided impetus for keen and ready Canadian entrepreneurs by blowing wide open the playing field and stirring up some long-held truths.

“(Our) Canada-U.S. trade relationship is the largest trade relationship between two countries in the world and it is the most historically-successful one. But, what we’re find-ing in an economic downturn (is) when America loses its buying power, if all your business eggs were in that basket, you’ll be in trouble, you won’t be able to make omelettes. So what we’re saying is ‘you can’t afford not to check out the other opportunities around the world’ and we as a government – one phrase that has always terrified me is, ‘I’m from the government and I’m here to help you’ – but, in fact, we will help business by getting out of the way and removing obstacles.

“So we said to people in Canada, ‘Look, we’ve put over two

billion dollars into developing port systems in Vancou-ver and Prince Rupert, we’ve got integrated road and rail systems, the sailing times are shorter between Asia and Vancouver than they are between Asia and Long Island or Seattle, the dwell times in our ports are less because they are not as congested and we can get your product to Chicago or Omaha in 100 hours, or rather, businesses can, because we’ve put the investments into infrastructure. And we need to do more; we need to always be saying ‘how can we help Canadian businesses get more and more competitive?’ But that’s our basic message to Canadian business – you can’t afford not to check out the opportu-nities internationally.”


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Heavy investment in Western Canadian port infrastructure has made

for more efficient commodity transportation to foreign markets.

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To give an appreciation of the recyclability and safety of the permeate, E. coli bacteria is 35 times larger than the pore size of the membrane. That alone mitigates the need for intense and environmentally-harmful disinfec-tion systems. The clean, clear resulting permeate may be used for dust control, down-hole drilling applications, irrigation, laundry, toilet and washing of vehicles.

Along with First Nations and South American develop-ment, the Ivanhoe systems are a focus of current large work camps in the oil and gas industry, including recy-cling for drilling and fracing. They are perfectly adaptable to commercial developments, summer villages and any forward-thinking small municipality, as well as decentral-ized urban communities without access to municipal in-frastructure.

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kathryn engel

Why Brazil?Why Now?

In all sectors in Brazil, we have open invitations for investment. We have an acceleration program in place, for example, that calls for $150 bil-lion (USD) to be spent on upgrades in infrastructure which is fully open to foreign investment – everything from water treatment to road con-struction, – all forms of our infra-structure.

~ James Mohr-BellBrazil-Canada Chamber of Commerce


James Mohr-Bell, executive director of the Brazil-Canada

Chamber of Commerce, urges the Canadian business

community to not shy away from opportunities in Brazil,

despite obstacles they initially might see.

inces in Canada. In any case, Mohr-Bell says the

hurdles Canadians may not be used to clearing

while doing business back home are well worth

the effort considering Brazil’s promising invest-

ment climate, as indicated by all local signals.

“In all sectors in Brazil, we have open invitations

for investment. We have an acceleration program

in place, for example, that calls for $150 billion

(USD) to be spent on upgrades in infrastructure

which is fully open to foreign investment – every-

thing from water treatment to road construction,

– all forms of our infrastructure.”

Brazil’s Petrobras and its ambitious goals of help-

ing turn Brazil into a major energy exporter with

plans to invest a staggering $174 billion (USD) be-

tween now and 2013 are also well-known. Given

Canada’s excellent reputation for being a world

leader in areas including oil and gas technology

and service, Mohr-Bell says Brazil represents a ship

set to sail on which Canadians would be amiss to

not be aboard.

“Brazil doesn’t have the capital for the economic

expansion planned. We really are bottlenecked

right now between a lack of investment capital …

and the capacity for growth. That (situation) rep-

resents just an enormous potential, which has not

yet been realized. “

Canada’s Export Development Corporation is

the federal government’s export credit agency de-

signed to help Canadians respond to foreign op-

portunities through trade finance for Canadian

companies and international companies using Ca-

nadian companies, as well as a whole line of risk

mitigation services.

Last year, Brazil rose to No. 2 on the list of coun-

tries at the focus of EDC spending – the first time

Brazil ranked ahead of China, India and Mexico.

In 2008, EDC provided a $500-million (USD) cor-

porate financing loan to Petrobras in support of a

variety of Canadian exporters.

The EDC’s Jim McArdle travelled to Rio de Janeiro

According to one of the most well-respected

agencies for regulatory arbitration and a

driver of Canadian investment in Brazil,

the country represents some of the most signifi-

cant opportunities for Canadians in the world, but

it’s not for the faint of heart.

James Mohr-Bell heads up the Brazil-Canada

Chamber of Commerce from his office in São Pau-

lo and says for Canadian companies willing to step

up to the challenge, there are few better climates

of investment return in the world right now than

those there for the taking in Brazil.

“What you find here are what I call generations of

Canadian investment in Brazil,” says Mohr-Bell,

who recently spoke with Slick World in a lengthy

dialogue about the opportunities and obstacles of

doing business in Brazil.

“As far back as 1899, Brazil’s system of public utili-

ties was made responsible by investors from Cana-

da, and that company interest remains here today

(Brookfield, once known as BrasCan). (It’s) one of

the strongest companies in Brazil and it is Canadi-

an. Then we had a whole generation of mining in-

terests from Canada come in through the ‘50s and

‘60s, which remain today, followed by a generation

of telecommunications in the ‘90s, and then later a

whole array of industries represented by Canadian

investment.

“So, if you ask some of those long-established com-

panies, they love Brazil. They describe the coun-

try as a very attractive foreign market, one of the

best places to do business anywhere. But if you ask

what I call the new companies, they say, ‘Oh, it’s

too hard, too complicated, too competitive, too

restrictive.’ They haven’t done the research, they

aren’t willing to make any long-term investment.

They don’t understand the marketplace here, or

Brazil generally. They just see it as complicated and

don’t pursue the opportunities.”

Others operating in Brazil say business between

the two countries can be easier than between prov-

Kat

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where Slick World caught up with him

at an address to Canadian companies

about Brazil’s highly-attractive market

potential – based not only on the re-

serves and development plans – but

also on the country’s commitment to

Corporate Social Responsibility.

“Brazil is completely committed to CSR,

and we’re seeing that now moving

through the whole system here, right

from extraction or exploration right

down to the suppliers,” says McArdle.

He says Brazil has gotten the attention

of the whole world with its determina-

tion to develop a new and unshakable

reputation for responsibility and is, in

part, promoting its oil and gas devel-

opment plans as a means of reducing

activity in the Amazon to displace

economic dependency.

From the country’s unparalleled ex-

penditures on research and devel-

opment, to disclosure and account-

ability, McArdle says Brazil handily

meets even EDC’s CSR requirements

for loans, which are among the most

strict in the world.

“CSR and ethics in general play a lead

role in our spending decisions. Busi-

nesses everywhere are subjects of in-

tense public scrutiny with everyone

watching for the social and environ-

mental impact of all their transac-

tions,” explains McArdle. “So that

aspect is of equal consideration to us

alongside pure economics.”

The significance of the Petrobras loan,

says McArdle, speaks to both the ex-

cellent opportunities for Canadians in

Brazil as well as a supportive Canadi-

an-Brazil trade relationship designed

in large part to help Brazil realize

some of its social development goals.

“We’re all looking beyond just the eco-

nomic or monetary possibilities alone

towards a consideration of the enor-

mous needs Brazil has right now for

social development – health, educa-

tion, infrastructure, etc. Our position

is as Brazil’s GDP grows, the country

can really address those needs prop-

erly. The best thing that can happen

in Brazil is true development in a sus-

tainable way to create the social struc-

ture they need here, and there are a

lot of opportunities to achieve that, in

part through the presence of Canadi-

an companies here taking part not just

in oil and gas but mining, minerals,

telecommunications, agriculture. Bra-

zil is in the fortunate position of not

being dependent on any one sector for

development.”

To put into perspective where Brazil

is at economically right now, Mohr-

Bells says one needs to understand

the country’s economic history, juxta-

posed with its aggressive plans for the

future for reforms for the country of

some 190 million people.

“(Canadians) need to realize, we came

from a military state, and we’ve made

some huge progress here. In even just

the last 15 years or so, but we still have

some key areas (in which) we need to

make progress. Those include tax re-

form. Currently Brazil’s level of taxa-

tion is close to 37 per cent of it GDP,

and it should be around 25 per cent.

We need better labour legislation,

which right now is still that written up

in wartime, and we still need further

political reforms. All of that would

make foreign investment more of a

smooth process.”

Even so, despite some of the limita-

tions that have hindered Brazil’s sus-

tained growth in its recent past, in-

cluding inflation, currency restraints

and even electrical shortages, the

country can point to several economic

bragging rights. Petrobras is consid-

ered one of the world’s most advanced

and powerful energy companies with,

for instance, a new research station be-

ing built in Rio de Janeiro to replace a

current one, which boasts more PhDs

than most other R&D facilities in the

world. The country has also made

enormous leaps and bounds in areas

of renewable energy including ethanol

and wind energy, and has among the

largest and strongest agricultural sec-

tors in the world.

“We have an agricultural sector unpar-

alleled in its competition because it

has the advantage of being low-cost

and also, because of the size of Bra-

zil, its agricultural base could triple in

size without cutting down one Ama-

zon tree,” says Mohr-Bell. “Brazil is

the largest beef producer in the world,

and has a very strong market in soy-

beans, poultry and many other agri-

cultural commodities.”

Canada already has strong ties to Bra-

Jim McArdle (centre), senior vice-president, legal services and secretary with Canada’s Export

Development Corporation, meets with business leaders from the Canada-Brazil Chamber of Com-

merce in Rio de Janeiro.

Kat

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Eng

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zil through a longstanding mining

relationship, with 55 Canadian com-

panies active in gold, metals and dia-

mond mining in Brazil.

Despite the potential, though, Mohr-

Bell says much work needs to be done

to open the doors of Canadian invest-

ment in Brazil – something his group

has made a top priority.

“From oil and gas to renewable energy

to food and agricultural processing,

the list is long for opportunities for Ca-

nadians here but we have work to do to

further that along. The two countries

are still very distant, they still know

very little about each other. There is

a huge barrier and we are working on

improving that understanding.”

The Brazil-Canadian Chamber has

helped facilitate exchange trips with

groups such as EDC, the Canadian

Consulate General and Ministry of

International Trade, and is lobbying

for things such as free-trade agree-

ments to, in part, move both countries

beyond some awkward past history

including old disputes over mad cow

disease and airline discrepancies cen-

tred around Bombardier.

Meanwhile, Mohr-Bell says Canadian

private companies can also do better

at seizing the opportunities before

them.

“Private interests have to better con-

nect their corporate vehicle to Brazil’s

economy. They have to make more of

an effort to do the research, get the

help they need, meet the right people,

find the right partners, understand the

rules and regulations, step up. That’s

where Canadian companies are failing

right now.”


Rio de Janeiro will undoubtedly see a flood of

development over the next few years as prep-

arations for the now-confirmed 2016 Olympic

Games ramp up.

Jeff

McC

oshe

n


PetrobrasWhy it’s a name you

need to know


As other companies around the

world were struggling to cope

with one of the most poignant

global economic recessions in history,

one state-owned oil and gas company

in Brazil was making news of its own

that would turn out to be even more

newsworthy than the great economic

meltdown of the century.

In the first six months of last year,

Petrobras, Brazil’s government-man-

aged oil and gas company went from

being ranked independently at No. 37

of the world’s largest companies all

the way up to No. 8. Petrobras’ mar-

ket value soared from 95.9 billion to

164.8 billion USD during that time pe-

riod, according to a survey carried out

by Ernst & Young.

When everyone else was retreating

and receding, Petrobras did what the

history texts will surely recall as no-

table; it increased its spending forecast

by more than 50 per cent and boldly

released a plan to spend $174 billion

USD before 2013 largely on explora-

tion and development and dared the

planet to hold it to its word.

Its goal is to become among the top

five integrated energy companies in

the world by 2020.

“We are beginning a new age,” Petro-

bras’ Marcelo de Freitas Guimarães

tells Slick World Magazine over an

espresso in a boardroom in the com-

pany’s 36th-floor headquarters in Rio

de Janeiro. “It’s the message Brazilians

are hearing everywhere these days, it’s

a new age, it’s a new day. This is a new

beginning for us in Brazil.”

That frontier spirit is based largely on

what lies beneath the depths of the

Santos basin tourists gaze off towards

on the beaches of São Paulo and Rio

de Janeiro.

It’s sometimes called pre-salt, other

times sub-salt, but one thing it is called

with increasing consistency with every

new find by almost any serious indus-

try watcher is the future of Brazil.

The oil lies under more than 2,000

metres of water and a further 5,000

metres under sand, rock and a shifting

layer of salt.

Petrobras is said to now have proven

reserves of 14 billion barrels in the

area.

Oil from pre-salt fields Tupi, Iara,

Guara and Parque das Baleias could

have production of between 10.6 bil-

lion and 16 billion barrels.

The 800-kilometre long stretch is now

being hailed as at least parallel with

Kat

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Eng

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the upper echelons of the world’s larg-est oil-producing regions over the next 10 years, if not the most significant. The expanse is now the most frequent point of promise amongst leading industry watchers across the world, who say it is set to become one of the world’s major oil-producing regions over the course of the next decade.De Freitas Guimarães, a top manager with Petrobras, says the drama that unfolded with the pre-salt discoveries was almost akin to a Brazilian World Cup soccer match – for the 300,000 direct and contracted employees of Petrobras, as well as the residents of Brazil.

“When the pre-salt discoveries were first made, it was, ooooohhhhhh, huge sighs almost, almost too hard to believe,” says de Freitas Guimarães. “It was, how would you say, it was wild, it was almost too much to take it. The whole world was talking about it, and people, even here at Petrobras, were almost afraid. They thought, ‘well, it can’t be produced, it’s too expensive, we don’t have the technology to do something like that. That hasn’t been done to that extent, anywhere of that depth.’ ”But then, the tests started proving pos-

Most critics don’t even believe Brazil’s

new oil law, passed while Slick World

was in Brazil, which boosts the gov-

ernment’s stake in Petrobras, can deter

the inevitable foreign investment in

the pre-salt development. That’s based

largely on the many distinctions be-

tween Brazil and other state-produc-

ing jurisdictions, including Venezuela.

Back in Rio, the phones and emails of

the managers dealing with the colossal

task of handling the operations post

pre-salt are hitting a feverish pitch.

“We’ve been preparing for this more

and more, for new development

by growing the company,” says de

Freitas Guimarães. “New people are

coming to work here, we have con-

tractors already, and, of course, we’re

itive. And positive, and positive again, with even better results than first ex-pected. The results continue to pour in, and even just days before Slick World’s second of two trips to Brazil, news of the latest discovery again exceeded ex-pectations.Even the harshest initial critics who warned Brazil would never be able to attract the capital needed, or that the high costs presented insurmountable economic risks, have subsided as dis-covery after discovery continues to speak to the reality of the mammoth reserves of amongst the best quality oil, and gas, in the seas. Petrobras now says the play is economically viable at a little less than $45 per barrel.

“When we started producing the wells and we could see what was there and the quality and amount and we could all see that – yes, we can produce this, we can grow, there was a new sense, people were talking now about – ‘Oh, there will be more work for us, and this is great for Brazil, this positions the company very well and everyone is very posi-tive, everyone is very hopeful about what this will mean for our future, yes, very positive.”

Marcelo de Freitas Guimarães is

a lead engineer with Petrobras,

whos assets were recently list-

ed at $133.5 billion USD.


dealing with more and more interest a lot. News of the pre-salt, new refin-eries, gas, transportation, L&G proj-ects, ships, everything is being talked about – a lot of companies coming to talk with us, show us what they can do to help us, making efforts to stay with us and grow with us. Pre-salt presents a big opportunity in all areas; it’s im-portant for the future of the company, the future of the country. It creates a lot of jobs.”As for the controversial 33 per cent government/Petrobras stake in the area, de Freitas Guimarães says it’s a complicated dialogue that gets caught up in the rhetoric and ill-effects of neighbouring countries.

“There is politics, of course, but gener-ally it is a good decision for Brazil. It preserves our quality of research and development and preserves the rev-enue that will stay here and go to the people, vocations, transportation and education and health. It needs to stay here in Brazil, this is needed, we know this.”

And he says after Brazil’s long and

well-known toiling towards economic

reforms, the country collectively is ea-

ger to let the world know it is finally at

the point of arrival, led by a company

that is about to be taken seriously on

an international stage even beyond oil

and gas.

“This has been challenging for the

company, as well as Brazil as a nation.

We (Petrobras) began 50 years ago as

a small company in Brazil, and we

began to grow and make some discov-

eries but now, with the extent of our

growth and discoveries, this is now a

good opportunity for foreigners to fi-

nally really see Brazil, through Petro-

bras if you understand; take Brazil

seriously. When they think of Brazil

now, it’s not only soccer. They think

‘Oh, Petrobras, it’s capable of very high

levels of oil and gas, it’s Petrobras, this

major powerful company,’ so they un-

derstand, ‘Ah, Brazil can do business

on a world (stage).’ This is good for

Brazil in many ways.”

See related story, Page 58

The recent pre-salt discoveries created quite

a buzz among Petrobras employees and resi-

dents of Brazil.

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IPAC SERVICES

IPAC Services has a 20-year history of strength, ingenu-ity and leadership in handling some of the most compre-hensive projects in the his-tory of oil and gas in Western Canada.

When Canada’s most growth-minded major and junior pro-ducing companies set out to

discover new frontiers of energy development, they turn to IPAC, a privately-held provider of construction, maintenance and logistics services.

The IPAC stamp of excellence in design has pioneered new advances in efficiency across the Western Cana-dian energy landscape, where the company has intro-duced new standards in large-scale facility construc-tion that are helping set a new bar in cost and time savings in the domestic arena.

At the same time, IPAC has moved forward and looked beyond in a new chapter of establishing integral rela-tionships in the international market.

It is through its solid partnerships and long-term re-lationships that IPAC is now applying its 20 years of experience and outstanding reputation for innovative solutions to some of the industry’s most challenging demands in important emerging foreign markets.

With its full integration of services, IPAC answers to the largest industry challenges with the most streamlined response, providing extensive construction packages including everything from fabrication, painting, trans-portation and field installation with supporting electri-cal and instrumentation.

IPAC Services Corporation is a leading provider of construction, maintenance and logistical services.

Our valuable experience and knowledge is gained from servicing a broad base of industry sectors.

IPAC’s expertise includes the oil & gas, petro chemical, utilities, wood products, pulp and paper,

forestry, power generation and mining sectors. Primarily serving the geographic region of Western

Canada, IPAC continues to explore North American and international opportunities.

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In its pipeline division, IPAC has become synony-mous with dependability and reliability, and with proven results in supportive intelligent systems of abrasive blasting and protective coatings built to address the most demanding terrains and con-ditions on the planet, IPAC is poised and ready to answer to the enormous needs of international in-dustry development.

In its new state-of-the-art 30,000 square-foot fa-cilities, IPAC has expanded its fabrication line and is certified to handle sweet and sour service pip-ing and pressure vessel construction and altera-tion, as well as any extent of construction, repairs and refurbishment.

IPAC is also an industrial-equipment dealer with access to a whole network of equipment associ-ated with some of the largest and most advanced oil and gas projects in the world and refurbished as required for specific international requirements.

IPAC has already transcended international bor-ders and has completed projects in Central Ameri-can and Europe. With a special interest in South America, IPAC has already built relationships in Brazil, where some of the most promising develop-ments are set to take place.

People are more important than numbers at IPAC, and based on that philosophy, the company has moved ahead of the pack in its aggressive commit-ment to the kind of quality assurance and control, woven right into the IPAC culture. When IPAC is on the job, wherever the job is, people, and property are protected.

20YEARS IN BUSINESS

IPACSERVICES CORP.


IPAC SERVICES

IPAC Services has a 20-year history of strength, ingenu-ity and leadership in handling some of the most compre-hensive projects in the his-tory of oil and gas in Western Canada.

When Canada’s most growth-minded major and junior pro-ducing companies set out to

discover new frontiers of energy development, they turn to IPAC, a privately-held provider of construction, maintenance and logistics services.

The IPAC stamp of excellence in design has pioneered new advances in efficiency across the Western Cana-dian energy landscape, where the company has intro-duced new standards in large-scale facility construc-tion that are helping set a new bar in cost and time savings in the domestic arena.

At the same time, IPAC has moved forward and looked beyond in a new chapter of establishing integral rela-tionships in the international market.

It is through its solid partnerships and long-term re-lationships that IPAC is now applying its 20 years of experience and outstanding reputation for innovative solutions to some of the industry’s most challenging demands in important emerging foreign markets.

With its full integration of services, IPAC answers to the largest industry challenges with the most streamlined response, providing extensive construction packages including everything from fabrication, painting, trans-portation and field installation with supporting electri-cal and instrumentation.

IPAC Services Corporation is a leading provider of construction, maintenance and logistical services.

Our valuable experience and knowledge is gained from servicing a broad base of industry sectors.

IPAC’s expertise includes the oil & gas, petro chemical, utilities, wood products, pulp and paper,

forestry, power generation and mining sectors. Primarily serving the geographic region of Western

Canada, IPAC continues to explore North American and international opportunities.

GRANDE PRAIRIE 780-532-7350

CALGARY 403-228-1919

ARIDRIE 403-948-1155

FORT ST JOHN 250-263-9330

FORT NELSON 250-774-4770

In its pipeline division, IPAC has become synony-mous with dependability and reliability, and with proven results in supportive intelligent systems of abrasive blasting and protective coatings built to address the most demanding terrains and con-ditions on the planet, IPAC is poised and ready to answer to the enormous needs of international in-dustry development.

In its new state-of-the-art 30,000 square-foot fa-cilities, IPAC has expanded its fabrication line and is certified to handle sweet and sour service pip-ing and pressure vessel construction and altera-tion, as well as any extent of construction, repairs and refurbishment.

IPAC is also an industrial-equipment dealer with access to a whole network of equipment associ-ated with some of the largest and most advanced oil and gas projects in the world and refurbished as required for specific international requirements.

IPAC has already transcended international bor-ders and has completed projects in Central Ameri-can and Europe. With a special interest in South America, IPAC has already built relationships in Brazil, where some of the most promising develop-ments are set to take place.

People are more important than numbers at IPAC, and based on that philosophy, the company has moved ahead of the pack in its aggressive commit-ment to the kind of quality assurance and control, woven right into the IPAC culture. When IPAC is on the job, wherever the job is, people, and property are protected.

20YEARS IN BUSINESS

IPACSERVICES CORP.


ConversationsCharles Labrunie, Petrobras

It is said to represent amongst the most promising opportunities for foreign oil and gas companies, including those from Western Canada. And while

Brazil’s Petrobras is known only as a ‘state-owned’ com-pany and conjures up images of Venezuela or Bolivia, in fact, the company has been operated independent of the state since 1997. And unlike both its state-owned counterparts and the

elite private oil and gas companies in its world-class rankings, Petrobras stands alone in what many

are calling its unique and perfectly-balanced mix of profitability in recessionary condi-tions, social spending, and environmental-ly-forward initiatives. With 300,000 em-ployees, one of the largest research and development budgets on the planet, (See related story, Page 50) and now poised to handle some of the deepest off-shore finds in existence with both its own and foreign leading-edge technology, the world’s eyes are squarely on what this Brazilian entity can and will do in the imminent future. Slick World editor Kathryn Engel was lucky enough to garner some face time with one of the company’s key decision-makers, Charles

Labrunie, who heads up the Petrobras logistics through its Transpetro arm.

Kat

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Jef

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ke: tell me, first, about operations and the development of transpetro in the structure of petrobras.CL: Brazil has a constitutional change in 1988. Before that time, Petrobras maintained a monopoly, and when that was broke, the law established Petrobras should separate all logistics, so Transpetro was created to operate all pipelines – 400,000 kilometres of pipeline or so, terminals, facilities, ship fleets, shipyards, on and on.

ke: everyone is talking around the world about the $174 billion usd. tell me about the decision surrounding the in-crease in projected spending in conjunc-tion with the pre-salt, and why it is so important and urgent now.CL: Most of that, over half, will go towards exploration and production, and yes, in the pre-salt, around 55 per cent. Over 30 some per cent will go to refineries, transportation and distri-bution. What we need to do in Brazil is we need to bring a lot of the poor people up to a new living (standard), and we need to give them develop-ment. As you know, we have a very large amount of poverty, very poor. We feel the profits we can get from development from this resource – this will create jobs, this will create many new industries, construction, roads, schools, water, sewer, all the trains, navigation – many, many aspects that need to be developed further here. There are many important develop-ments that need to come from our resource, and we need to do that now, for the development of Brazil.

ke: there has been a great deal of dia-logue surrounding that, yes, the poten-tial for this pre-salt in the history of bra-zil’s economic development. CL: Yes, yes. The opportunity of the pre-salt. To have, to realize our history of Brazil, this is where we are, this is very important to us. The main prob-lem is, of course, how to manage our resource in the proper way to guaran-tee most of it will help our country de-velop, bring poor people to better con-ditions. More school education, better conditions. You can see, I know you can see that need.

ke: i’ve read and heard a great deal lately about brazil becoming the next superpow-er, or certainly the next superpower of the south. from your experience in brazil and in petrobras, what is your thought on that dialogue?CL: (Laughs gently, pauses thought-fully.)Oh, I don’t think the people of Brazil are thinking of this, the population is not thinking of this, no, I would say this is not our main –

ke: goal?CL: Vocation, I think is the English word I think of – this is not our main vocation. We have so many things to do to improve, to bring up the living, the standards – all the new resources will not be about, or enough, to cre-ate a new superpower in the world as some say. That is not my own thought. Maybe, yes, maybe it will increase our leadership in South America, Latin America, maybe, but we think, and I think we need to know how to devel-op not only for us but also our neigh-bours. One point we all feel, myself included, this development will bring a lot of advantages not only to us but the world; more education to rebuild things like Amazon cutting – there will be a great reduction in cutting trees in the Amazon because there will be less need for that money from that resource because of this oil and gas development. This is good for the whole world, it’s important. People have needed to explore in those areas because the money has been needed but if our oil and gas reserve is well managed, we can reduce that for our benefit and (that of) the world.

ke: there has also been so much discus-sion over whether or not this is all feasi-ble, how much of it petrobras can handle, how much foreign investment is needed? CL: You saw the amount of investment we need (semi-private presentation at Rio Pipeline seminar), I have abso-lutely no doubt we need foreign invest-ment to help develop this resource for the benefit of all Brazilians. You saw the magnitude of this resource. It will be impossible to develop this resource

Brazil’s agricultural industry also represents

what officials call a world of opportunities

for Canadian investment in the growth of

the Brazilian economy. Here, a street ven-

dor sells his wares in downtown Rio de Ja-

neiro.

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alone. We are interested in partner-

ships – people who come in here in

partnerships or establish here and do

business in a way that establishes a

long-term relationship with countries

coming here.

ke: in canada, as you know, we are not unfamiliar with state-controlled indus-tries. that has been a part of our history and something business understands and respects to some extent, especially in cer-tain situations where that support for the population is essential. what are your thoughts on canadian investment, in general?

CL: I can say about my experience, it

was always, in all my years, easier to partner with Canadians. We in Brazil and in Petrobras always feel Canadi-ans understand looking at both sides of an interest, not only their side. This is the truth of my experience. Cana-dians – you understand partnerships, the principals of good partnerships, both sides of that equation, yours is not a selfish business model. And you understand what it is like, this type of situation because you have had this experience – you have had other coun-tries, foreign investors coming into your country, wanting to come in and do business, and you have struggled

ABOVE: Random weekend afternoon game gatherings where locals can be overheard discussing the popular economic reforms being put in place to augment living conditions are a common sight across Brazil’s urban areas. RIGHT: Petrobras says oil and gas development will lessen use of the fragile Amazon. Here, a child sells nuts harvested from the region. FAR RIGHT: A Cariocan, a native of Rio de Janeiro, feeds the birds of the Copacabana.

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to keep the (profits) of those resources foreigners, including the U.S., have developed in your country. You un-derstand this better, our importance of working together with foreigners in a situation that is still good for Brazil-ians, in good relationships with the countries investing here. You, as Ca-nadians, have a particular sensitivity to this.

ke: yes, we do have a lot of dialogue about americans, in particular, coming in,. you’re right of course. where i live, oil is piped down to chicago right past us and sold back to us as gas.CL: Yes, exactly – this experience is not unlike what we are facing now. We believe Canadian businesses will understand some of the concern, the need for Brazilians to have a benefit of our development.

ke: canada now has six trade offices here in brazil. does that, in your opinion, speak to our relationship between the two countries as trading partners and oppor-tunities in the future?CL: That shows, yes, it is a big sign of willingness on both sides, to do busi-ness.

ke: yet, we hear stories of canadians frustrated because they haven’t been able to get themselves in the door here.

CL: I don’t have that perception, I have

a complete opposite perception. Con-

sidering my own experience, it was

always easier to do business with Ca-

nadian firms and we have strong ex-

periences – long-term contracts with

Enbridge who came here and helped

us develop our pipeline and we have a

very good long-term relationship with

Enbridge. Our automation systems for

our pipeline systems are provided by

Telvent here – 12 years of strong part-

nership with this company and it has

been a very important relationship. I

have many other examples of strong

Canadians here and we have never

had anything but an excellent rela-

tionship with the Canadians working

with us, so I would say my experience

is that there are lots of opportunities.

ke: we have intense competition back in canada right now. describe the situation here.CL: Here, we are trying to make it more competitive! That’s a main goal, to make our local business environ-ment more competitive, that is why we need much more foreign presence here. I will tell you – in shipping, a sto-ry for you. We used to be the world’s second biggest producer of ships in the past and we have lost that. This is a huge example for my department right now. We built a new shipyard in Recife, where you were, and we’re (Petrobras/Transpetro) buying 10 new tankards from this shipyard. We understand the concept that, at first, this can be more expensive and not as competi-tive as it could be, we understand this, but we want those to come down to international price as quickly as pos-sible to be competitive. So sometimes we have internal problems competing

– we are big producers, as you know, of steel. But sometimes, if we don’t find a steel price here that we need to build the ships in a competitive way, we say, ‘Okay, that local shipyard needs to be competitive.’ We are not going to kill our shipyards to help the steel manu-facturers here in Brazil – they need to be competitive to sell us their steel to make our shipyards competitive on an international market. We, of course, want to give priority to steel makers here in Brazil but that shipyard is very important to Brazil so it needs to be competitive. So we will make them more competitive, or take the more competitive price. Do you understand how important that is? We have many, many workers here at this new ship-yard, and a huge possibility to com-pete internationally. Many Brazilians are getting their first real work there and we have this chance to become a leader again in shipbuilding. Because we are demanding competition, that shipyard now which started with just our (Petrobras) orders now has three new international orders.So the same concept will be applied to refining – so, I have a contractor, a pet-

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ro manufacturer, a pipe manufacturer – anything – if you want to establish here as a manufacturer you need to be competitive in a global market, both our local companies and international companies here. So we need to start thinking of that. This is why there are opportunities for Canadians.

ke: imminently?CL: Yes, I think the learning curve should be very quick. After a certain period, for example, we want ships built here in the same condition as other areas in the world, and every other area will be the same subject. Any new company can come in and establish a deal with Petrobras, or with Brazilian partners – petrochemi-cals, agribusiness, many areas – a lot of areas people can do partnerships – always helping Brazil create jobs, very many poor people that need to come to market – establish competitive companies that can play in the global market.

ke: you’ve been in the business for many years with petrobras. tell me what the pre-salt finds meant to petrobras and brazil.CL: We’ve had a difficult time in the past – we were a very small producer

for very many years. In the past, as

you know, we had to buy most of our

oil. Then we came to a situation now

where we are not relying on other

countries, after very high exploration

and production. Now we’re produc-

ing enough for our internal markets –

we purchase some light crude but we

make up for that with other exports.

This independence has just been in

the past three years. So then we find

this pre-salt, and we were not expect-

ing that at all – independence was

enough for us, supplying our own

needs, and then we discovered this

enormous supply, some two years ago,

but really most of it just in the last year

and we’re still discovering and being

surprised by the extent of it. So now,

yes, we’re redoing our strategy – what

we are going to do with all this oil and

gas we were not expecting. And yes,

now is the time for foreigners, for Ca-

nadians to see what we have and how

they can help, play a part in that.

And oil and gas is not all of what our

GDP is about. There are very many

other opportunities we haven’t even

talked about. Agriculture is a huge

area of opportunity for us and part-

nerships with Canada.

We have a lot of water – 20 per cent of the world’s fresh water supply and a lot of land now used mostly for cattle which is available too for crop devel-opment. And our cattle industry – did you know we have the same popula-tion of cattle as people?

ke: really – some 190 million cows in brazil?CL: Yes. (Laughs.) And we have a very large area for crop development as well, so we don’t need to cut more trees for agricultural development. We have a lot of area to grow crops, and there are other agricultural things we want to develop with strong opportu-nities for Canadians, in particular. We are doing much development in the area of biofuels, another strong op-portunity I feel we can boost through partnerships with Canadians.

ke: it’s a great story for brazil.CL: Yes, it’s a great story, it’s a great mo-ment for Brazil, and we hope we will use this opportunity in the best way for this country – to meet the needs of our poor population, to make a better life for the people here.


It’s a great story, it’s a

great moment for Bra-

zil, and we hope we

will use this opportu-

nity in the best way for

this country – to meet

the needs of our poor

population, to make a

better life for the peo-

ple here.

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Canadians who have set up shop already say where there’s a will, there’s a way

Getting Down to Business in Brazil

Sitting across from one of his

Petrobras contacts in Rio de

Janeiro, deep in a Portuguese

technical discussion about one of his

company’s products at a well station

up-state – flanked on either side by

his two Brazilian engineer/representa-

tives – Jack Archer looks as comfort-

able as if he was in his company’s Cal-

gary boardroom.

That’s in large part because he is at

least as familiar with the scenario,

quite probably even more so than one

might think. Archer, the South Ameri-

can director for Calgary’s Global Ther-

moelectric, has spent almost his entire

career collecting vivid and varied ex-

periences across Africa, Europe and

South America.

First as an engineer with Dowell Sch-

lumberger and later as a CIDA rep-

resentative before selling integrated

remote power units for Global, his

many career memories include his-

torical monuments such as working

in the Libyan jungle the day of, and

weeks following, the Muammar Gad-

dafi revolution, and being in Bolivia

on the day Ché Guvaro was captured

and killed.

Fluent in Spanish and more familiar

in Portuguese than he lets on, Archer

represents amongst the most promi-

nent Canadian presence in South

America and, especially, the emerging

market of Brazil.

Jack Archer of Calgary’s Global Thermoelec-

tric strategizes with the company’s Brazilian

agents, Monique Valente and Luiz Fernando

Souza in Rio de Janeiro.

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lente, to represent the product. He says she was responsible for making huge inroads into the all-important task of building integral relationships with Petrobras.

“She was really able to technically convince them our system was more economical and dependable than any-thing they had tried in the past – and they have been extremely happy with our systems ever since and we are al-ways increasing our work with them.”All of Global’s Brazil work is a result of the work the company does with Petrobras or one of its subsiduaries, as is almost exclusively the case for any foreign presence in the Brazilian oil-patch. And with a promise to inject $174 bil-lion USD into Brazilian oil and gas development before 2013, Canadians facing an industry slump back home should consider looking to Brazil, says Jonathon Saint of NetSafety, another Calgary company in the country.

“About 75 per cent of Global’s business is international, and 50 per cent of its business is outside of both Canada and the U.S., and South America, in-cluding Brazil increasingly, is a really important part of that mix for us,” says Archer.Being well-positioned in South Amer-ica just as the lucrative Brazilian mar-ket is presenting what Archer calls real and exciting opportunities for Cana-dians, he says, gives the company an inherent advantage.

“This is a place for smart Canadians to explore. Canada is a leader in gas. Al-berta is one of the largest exporters of gas anywhere. Brazil is now, with the pre-salt, getting into the market in a major way and is no longer depending as much on gas from elsewhere. The plans for development of this reserve here are absolutely massive and the opportunities are ripe.”Archer says Global really started tak-ing hold in Brazil in 2000, when he hired a local engineer, Monique Va-

ABOVE: Construction projects are common throughout Brazil as Petrobras continues to invest heavily. LEFT: At the CTDUT research centre in Brazil, a Canadian checks out work being done on a high-pressure hot-taping re-search project for the pipeline industry.

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Net Safety has its fire detection line of products in almost every country in South America and has had a presence in the Brazilian market for the last four years, also through a local engi-neer/rep.Saint says Brazil now represents the most exciting and potentially lucra-tive jurisdiction and is a major point of focus.

“The entire South American region is important to us, but Brazil alone is just huge, huge potential,” says Saint.

“The opportunities are well-known and just tremendous.”Net Safety’s Rio de Janeiro represen-tative, Horãcio Rodrigues, has intro-

duced the product to Petrobras in a variety of applica-

tions from batteries, well stations, re-fineries and platforms and has even helped refine the product to meet the needs of the Brazilian oil giant and capture that market edge.

“We worked with them (Petrobras) very closely to make sure we are pro-viding them a product very specific to their advanced needs and, in return, they’ve really eagerly responded to the product line.”Claudia Scheiner of São Paulo has been the exclusive distributor for Cal-gary’s SMART Technologies – makers of mainly computer whiteboards – across Brazil, since 2002, and she has been selling the product for SMART Technologies since the early 1990s.In the last couple of years, Scheiner says the demands for the software systems have skyrocketed as Brazil’s market opened fully, and she now has 90,000 systems of the Calgary product across Brazil.

“The product is used in schools, corpo-rate offices, government, everywhere, and Brazil has really responded to it because it is a very effective solution that is extremely easy to use and is backed by the most solid warranty and product support system available,” Scheiner says from her busy São Paulo corporate headquarters.

“Plus, Brazil is very aggressive right now getting everything up to speed in many areas, including education,

ABOVE: The demand for SMART Technolo-gies’ whiteboard has soared in Brazil as the country continues to open up to new technol-ogy. BELOW: Horãcio Rodrigues represents Calgary’s Net Safety in Rio de Janeiro.

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Michael Okun, vice-president of the interna-tional division of NHC, has been pounding the pavement in Rio de Janeiro trying to increase the company’s presence there.


and all of its corporate systems, and this product is applicable to that. The government is investing a lot of money right now in things like edu-cational upgrades, upgrades in every area, infrastructure, everything.”Scheiner says the growth in the pop-ularity of the product is reflective of the enormous opportunities across the, well, board, in Brazil, and that is only sure to increase exponential-ly with the development of the new pre-salt reserves.

“Our country is growing so fast, you’d have to be right here all the time to see the growth as it unfolds. It’s on everyone’s mind and it is happening so quickly. There are so many opportunities right now in ev-ery sector.”Michael Okun is vice-president of the international division of NHC, a hydrotechnical engineering com-pany which is headquartered in Edmonton with satellite offices in Vancouver, Seattle, Sacramento, Pas-adena and Lake Tahoe.Okun says while the company has had a strong international presence since 1976, predominantly in Asia, he has had his eye on the Brazilian potential for the last four years and has stepped up his efforts dramati-cally in the last year or so.

“We’ve worked on pipeline and river navigation projects here already, so we have a presence here, but we are really trying to build that up with a more significant base here in Brazil,” says Okun, who met up with Slick World at the recent Rio Pipeline ex-hibition, which works in conjunc-tion with Calgary’s biennial pipe-line show. Okun says he has been pounding the pavement in Rio trying to es-tablish the needed relationships in order to cash in on some of the new projects coming on line as a result of the well-known Petrobras budget increase.

“Brazil is definitely the USA of South America, so if you want to work here you have to start learning the

The opportunities just opening up here are

just enormous. Brazil is going to be one of

the largest markets in the world very soon,

right alongside China, the U.S. and India.

I don’t think people realize how fast Brazil

is stepping up and how much faster that is

taking place than everyone first believed.

~ Gerald HermanFiltermaster distributor

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language and culture and how they do business. So the only way you can come in is if either if you have some-thing extremely unique that they don’t have, and even then they will find a way so that you will need to transfer that into the system somehow, or if you just build up some great connections.”In any case, Okun says whatever effort he is making in Rio now will undoubt-edly pay off enormously in the long run.

“The feeling here is like USA or Canada was in the ‘50s or ‘60s, except they have modern technology here. Everything here is done in very advanced systems and in a climate of high corporate re-sponsibility, environmental consider-ations, all of that, very modern. But in the sense of investment in exploration and production, and what is being de-veloped in infrastructure, what is being invested in is just enormous, much big-ger than at home because they are a lot further behind in infrastructure devel-opments. The opportunities really are extraordinary. We get our work where people are building new infrastructure or refurbishing new infrastructure or need help managing it so, there’s 190 million people here, as much or more than the rest of South America put to-gether. The only other place that even comes close to this feeling of develop-ment in investing is Chile, but it’s just so much smaller. Brazil is the centre of the universe in that respect.”Grant Jameson, president of Entec, a Calgary company specializing in HDD services, recently made his first trip to Brazil because the Petrobras $174 bil-lion USD plan for exploration and de-velopment caught his eye.

“Brazil is such a developing market,” says Jameson, who made the trip from Calgary to Rio to explore the oppor-tunities. “It’s one of the few places left in the world right now (where) you’ve seen capital investment increase ... They have long-term plans for devel-opment. They’re not worried or con-cerned about near-term fluctuations in commodity pricing and energy pricing. They have a more long-term vision of

FAST FACTSOfficial Name: Federal Republic of Brazil

Capital City: Brasilia

System of Government: Brazil is a multi-party political system that holds demo-

cratic elections for president, senators, representatives, state governors, mayors and

city councils. It is interesting to note that Brazil leads the world in online electronic

voting with over 100 million voters (2004).

Land Mass: Brazil is the largest country in South America at 3,286,470 square miles,

occupying almost 50 per cent of the South American continent. It borders every

South American country except Chile and Ecuador. About 58 per cent of Brazil is

covered with forests, including the world’s largest rainforest in the Amazon River

Basin.

Economy: Brazilian economists predict the country’s gross domestic product (GDP)

will grow foor to six per cent in 2010, while inflation is expected to be reined in at

about four per cent. Economists also forecast that the country will account for 29

per cent of Latin America regional oil demand by 2010, while providing 21.5 per cent

of supply.

Language: Although it is already being called the ‘superpower of the south’ Brazil is

the only South American country that consistently faces the challenge of being the

only Portuguese-speaking country in the hemisphere. And while outsiders believe or

assume Brazilians can largely manoeuvre in Spanish, most Brazilians are more likely

to understand English than Spanish as their second language.

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the energy industry and that is where we all want to be.”Jameson says the current situation in Alberta of bidding wars that have es-calated to the point of below-cost bids being submitted, the royalty structure which has seen more companies seek work in places such as Saskatchewan and B.C., and a highly competitive environment has him gravitating to where opportunities are more attrac-tive.

“In Alberta, you just have to start thinking outside the box. You know, the recession hit in Alberta hard, and royalties topped it off. This place is attracting capital and you’re seeing other places everywhere else, even in our mutual home turf back in Cana-da, where the opposite is happening

– capital budgets are just disappearing. One of the largest energy companies in Canada, EnCana, just stripped 50 per cent of its capital budget away from its Canadian operations down into plays in the U.S.,” says Jameson.

“So when you see capital leaving, you know that the metrics just aren’t there – there are better opportuni-ties for them and they’ll go find them and there will be a ripple effect on all service companies in Western Canada when those companies start to leave. You have to go after it. Petrobras is our EnCana, and what they are doing here is the opposite of what EnCana is do-ing at home. You have to follow capital, you need to look for new applications for technology and get yourself ahead of the curve. I think Brazil presents a world of opportunity for Canadians.”IPAC is a fully-integrated construc-tion, maintenance and procurement company in northern Alberta that has handled some of the largest projects in Canada, and also is growing tired of waiting around for things to improve in Alberta.IPAC president Ron Ward is eager to explore what the ground level of Bra-zil’s development has to offer.

“When you look at what is happening in Alberta, with the bidding wars and the overall stalling of our industry, it’s

When you look at what

is happening in Alberta,

with the bidding wars

and the overall stalling of

our industry, it’s worth at

least exploring the poten-

tial of a market ripe with

really solid opportunities

just to see if those make

sense for us.

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worth at least exploring the potential

of a market ripe with really solid op-

portunities just to see if those make

sense for us. At least we know we’re

not just standing around waiting for

something to give around here.”

Miguel Leach works for Vancouver’s

BGC Engineering out of his Argentina

base, where the Canadian engineering

firm has had a presence since 2001.

“South American is our most impor-

tant destination as a company, outside

of our very strong core base of work in

Canada,” says Leach, who met Slick

World in Rio de Janeiro at the Rio

Pipeline conference.

“The Andean geography has provided

us with ideal situations – companies

have faced many challenges having

their pipelines, water lines and slur-

ry lines traverse through some very

tough terrain and (that) provides us

with very challenging and ongoing

opportunities,” says Leach.

It was that South American presence,

in Argentina and Chile specifically,

that allowed the Canadian company

to better withstand the full brunt of

the recession.

“This was actually our busiest year ever,

and we were afraid we’d be victims of

this huge crisis that has affected ev-

eryone. But, in large part because of

the mix of business we have in South

America – a lot of our business is relat-

ed to copper and gold mining which

has kept upbeat here throughout the

crisis – we have many ongoing proj-

ects with clients’ portfolios that need

to continue.”

For the last few years, BGC’s represen-

tatives, including Leach, have been ac-

tively attempting to build a presence

in Brazil – a market he concedes that

has so far been a “tough nut to crack.”

Because of the Petrobras budget for

development, Leach says BGC is even

more determined to be persistent in

... they won’t be able to handle this

alone, they are going to need a lot

of help. You have to be in the right

place at the right time.

~ Miguel LeachBGC Engineering, Vancouver


its efforts to tap into the local market.

“Just think of point one per cent of

that $174 billion spent on consulting

– we’ve obviously got a thirst for that

kind of development.

“No other country is going to be that

aggressive, and if you consider the an-

nouncements just over the last month

or so with the discoveries they’ve

made, I really believe, as do they, they

won’t be able to handle this alone,

they are going to need a lot of help.

You have to be in the right place at the

right time. Local people need to real-

ize that as well – they won’t be able

to handle it alone, they need the help,

and we want to be right here when

they realize that.”Gerald Herman is the exclusive Fil-termaster distributor for the Cana-dian company in South America and was celebrating his very first product sold to Petrobras the day Slick World caught up to him in Rio de Janeiro.

“It was a very small order, one product, it doesn’t even pay for bus fare,” laughs Herman. “And we’ve been knocking

on doors for three years here, but it’s a start. The opportunities just opening up here are just enormous. Brazil is going to be one of the largest markets in the world very soon, right along-side China, the U.S. and India. I don’t think people realize how fast Brazil is stepping up and how much faster that is taking place than everyone first be-lieved.”

Herman says alongside the raw poten-

tial of the on- and off-shore reserves

in Brazil, the country represents one

of the most attractive economic, so-

cial, political climates in the world in

which to do business.

“The Brazilian government is very

forward, very aggressive, very open-

minded and very modern. Petrobras is

state-owned, but it’s profit-orientated,

and open, very open, to investment.

Brazil is not at all like other coun-

tries in South America with state-con-

trolled reserves. It’s just a very good

place to do business and one we are

very much interested in pursuing.”

Canadian companies who have been

making every effort getting into Brazil

say they will continue to step up their

efforts in order to be on the ground

floor of what they believe will be a his-

toric moment of growth for Brazil.

“Brazil, as a country within the hemi-

sphere in South America, will grow to

become the superpower of the south,”

says Leach. “It is getting a lot of at-

tention in the U.S. and Canada and,

frankly, the people of the north will

not allow this monster to grow as big

as it wants. They will keep a check on

it and they will be working with them

as allies and partners right alongside

that development. There are a lot of

synergies Brazil can take advantage

of, from the Northern Hemisphere be-

cause of that experience in oil and gas.

We’re probably 30 years ahead in your

Canadian resource play and we need

to use that position to gain access to

the possibilities.”


Brazil is such a developing market,

it’s one of the few places left in the

world right now (where) you’ve seen

capital investment increase ... They

have long-term plans for develop-

ment. They’re not worried or con-

cerned about near-term fluctuations

in commodity pricing and energy

pricing.

~ Grant JamesonPresident of Calgary’s Entec

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Wearing the Flag

kathryn engel

Miguel Leach was born and raised in Argentina and now works for Van-couver’s BGC Engineering Inc. out of his Argentinian base, where the Canadian engineering firm has had a presence since 2001.

After working in the U.S. in the oil and gas industry for a variety of several large American companies, Leach encountered the Vancouver BGC.

“Ten years ago I jumped at the chance to work with a Canadian firm,” says Leach, who adds Canadians have such a strong reputation for good business right across South America they ought to capitalize on more local opportunities as a result.

“Canadians in business here are known as the Swiss of the Americas. The way Canadians do business and go about business is just the right way. It’s the high-est road. I’ve worked with a lot of American companies and I can tell you the difference right across the industry is night and day.”His work for a Canadian firm out of his home country of Argentina has proven to be an asset in his dealings with companies across South America.

“South Americans know the level of proficiencies and professionalism they are going to get when they work with Canadians. There’s a unique optic Canadians use to focus on business, which is not through statistics and numbers and ratios but doing the right thing, the proper thing and doing it right the first time and I can tell you that buys a lot of confidence. That is an excellent reputation.”Brazilian Claudia Scheiner has been pitching her Canadian product for over a decade and says the fact that it is made in Calgary alone gets her in the door in more cases than not.

“As soon as I tell people it was made in Canada, they are more interested, sim-

Petrobras officials have said the Canadian model of business is stellar. Reps across Brazil say they’ve gained their most mileage from putting forth the Canadian angle in sales. Slick World explores why the Canadian flag might just be the best point of sale, and may well provide access to the most potentially-lucrative market in the world.


”

“Applying the

to

across South America.

Canadian Innovation EconomicDevelopment

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ply because here in Brazil, Canadians and Canadian products have an excel-lent reputation,” says Scheiner. “I re-ally think products like the Blackberry that absolutely everyone has here and everyone just thinks it’s the smartest technology ever made, that has really helped my product because people as-sociate high technology with Canada now.”Horãcio Rodrigues’ main competition for his Calgary product comes from Germany and the U.S. Like Scheiner, he says in his experience, the fact that it was made in Canada made the dif-ference in getting the sale or not and, as a result, he positions his product as Canadian immediately.

“Whoever I’m dealing with in engineer-ing systems, Canadians are known to be associated with very advanced sys-tems here in Brazil,” says Rodrigues.

“In oil and gas, Canadians are known to have come from a more advanced in-dustry with more modern systems and solutions. People see Canadians here as very hard-working, very good at what they do. When you talk to people about your Canadian product or even your Canadian company you represent, they see Canadians as always working very hard with the company to improve the

systems, and also to keep a very strong relationship.”In his case, Rodrigues says even though his product comes from greater dis-tances than some of what is available and therefore is often at a higher price point, it is still chosen, in part, he says, because of that Canadian stamp of ex-cellence.

“People take your products seriously if they know they are made in Canada. They know they are going to work.”Jack Archer, who has spent a lifetime in oil and gas in South America, says he has always had an edge for being a Canadian.

“Canadians are, generally speaking, seen and, and they are, more acceptable

– they are keen to speak the language and appreciate and respect local culture, many are used to the concept of speak-ing more than one,” says Archer, who is married to an Argentinian and speaks both Spanish and Portuguese fluently.

“I also have people saying Canadians don’t have that superior thought (that) ‘we’re the best in the world,’ even in cases where we are the best at what we do or have the best products. People here really like that more humble sense. I know they’ve been really open to my-

self and other countries for all the years

I’ve worked here.”Scheiner says the great misfortune in Brazil for Canadians is the fact that they are largely not capitalizing on the opportunities their great reputation al-lows for.

“It’s funny almost to me, how bad Ca-nadians are at marketing themselves,” laughs Scheiner. “Here in Brazil, other countries do that very well, foreigners included. The Americans make so much noise compared to the Canadians. I feel very strongly Canadians should look for more opportunities here because Brazil is so open to them, but they don’t give any importance to solid business de-velopment and commitment to things like being here with a plan for brand management here in Brazil. If you want to be successful in Brazil, you have to really develop your brand here through some long-term relationships that can help you do that. You have to invest in relationships that will both handle your business here, help you have a presence here, and manage and protect your brand here.”


As soon as I tell people it was made

in Canada, they are more interested,

simply because here in Brazil, Cana-

dians and Canadian products have

an excellent reputation.

~ Claudia ScheinerSMART Technologies


TheGoodTheBad

TheUglyThe gamblers of Western

Canada’s oil and gas industry

see light ahead


It hasn’t been an easy year in West-ern Canada. The oil and gas in-dustry has faced challenge after

challenge: shifting royalty regimes, plummeting natural gas prices, and the recession’s hefty appetite for gob-bling up company cash flows.However, the industry, when you get down to it, is a massive conglomer-ate of gamblers. True, they are gam-blers backed up by experience, cash and teams of geologists, but there is never a guarantee of good times. Now, with many predicting the worst is over, hope is starting to spring up again. Royalty incentives, slowly rising gas prices, and the recession’s hesitant de-mise are all pointing to more promis-ing times.First, to get the brutal truths out of the way. Investment is down $16 bil-lion this year in Western Canada – at $34 billion compared to $50 billion in 2008 – according to the Canadian Association of Petroleum Producers (CAPP). Gas industry profits are fore-cast to be down 60 per cent from where they were in 2008, says a new report by the Conference Board of Canada. Gas prices have been abysmal, sinking from last year’s record highs of $13 US per British Thermal Unit (btm) to less than $2 at the beginning of Septem-ber. In 2008 there were 16,800 active wells in Western Canada, according to the Canadian Association of Oilwell Drilling Contractors (CAODC). Their projections for 2009 are just over half that: 8,787 wells.

“I would say it’s been a very, very tough year,” says Laura Lau, senior portfolio manager for Sentry Select Capital Inc.

“It’s been a big roller-coaster as well.”“Simply put, the industry has gone through probably one of the more severe hollows that we have seen in Western Canada,” says Peter How-ard, vice-president of research for the Canadian Energy Research Institute (CERI).With the year starting out deep in the financial collapse of the stock market, the initial dramatic drop of the prices of both crude oil and natural gas hit hard.

“It was a pretty devastating scenario,” says Howard. All in all, it’s been a tough ride for the oil and gas I industry in 2009. Howev-er, cautious voices of hope are speak-ing out. It’s a world of ups and downs and the downs can’t last forever.

Alberta on the mendAlberta, the former golden province, has taken a beating this year. The troubles began when the provincial government raised the rates of some royalties – the cut of the proceeds taken from oil and gas to fill provin-cial accounts – substantially in late 2007, confidently announcing its New Royalty Framework as the economy boomed around them.

“A policy of lower royalties to maintain a minimum level of investment is no longer needed to attract investment to Alberta,” read the New Royalty Frame-work report explaining the changes.It may have been a misstep: The move created a lot of anger in the industry and an almost instant slowdown in operations.

“Without exaggerating, overnight it killed exploration,” says Steve Kapusta, president and CEO of Canext Energy, a junior exploration company operat-ing in northern Alberta. “Convention-al exploration in Alberta died October 2007.” There were 376 rigs drilling in 2006. In 2007, and that number fell to 266. Companies that were able moved their operations to British Columbia and Saskatchewan, where the royalties were more forgiving.The rates made the risks too risky, in-dustry said. With the maximum rates for oil and gas wells increasing from 35 per cent to 50 per cent, the royal-ties structure penalized success, says Kapusta.

“It increased the royalties on the best wells, which have to pay for the fail-ures. It was shortsighted,” he says.The royalties were changed when the good times seemed endless. The fact that the good times came to a rapid halt practically as the changes were made had a devastating impact on the province.Despite the incentive programs an-nounced this spring, royalties were the major factor in Alberta’s fall from grace in its standing in the Global Pe-troleum Survey, according to Gerry An-gevine, who co-authored the report published by the Fraser Institute in June.Alberta used to be the second-most at-tractive place to invest in Canada after Saskatchewan, ranked by the execu-tives of oil and gas companies around the world. That was in early 2007. In 2008 it fell to sixth place.


This year Alberta sits at eighth spot

out of 11 – dead last for the prov-

inces. Only the territories, with their

icy climates, difficult landscapes and

complicated land claims issues, rank

below.Anonymous comments are included in the report. Comments include, “An-ti-energy ambiance,” “unskilled, un-educated, and inaccessible leadership with out-of-control regulatory expan-sion,” and “the companies enjoyed a few good years of profits and in turn get nailed with punitive royalties...”All seven comments included in the report are negative. Every one of them mentions the royalties.

“We didn’t just pick negative com-ments, we tried to get a balanced view but unfortunately in the case of Alber-ta, there weren’t many positive com-ments, if any. There certainly seems to be a degree of bitterness out there and a great deal of unhappiness on the part of the industry,” says Angevine.

It’s a precarious balance for the pro-

vincial government. Royalty rates

must be high enough that Albertans

get a fair share of the bounty. They

must also be low enough to ensure

that companies will actually want to

invest in the province.

However, the survey was taken be-

tween February and April. In the

midst of that, Alberta moved to make

amends. With CAPP forecasting a 27

per cent drop in oil and gas activity

in the province for 2009, the province

has taken steps to boost the industry.

In March, a royalty incentive program,

reducing royalties on certain types of

conventional oil and gas wells to five

per cent or less for a year, was rolled

out, to positive reception. Companies

can also receive royalty credits of $200

per metre on conventional oil or gas

wells drilled. These incentives were ex-

tended by a year in June, giving com-

panies until March 2011.

CAPP welcomed the incentives on be-half of the industry. The changes are positive ones, says Greg Stringham, vice-president.

“There were a number of short-term incentives to ensure we retain the rigs and the labour and the people here as much as possible during the down-turn so they’re there, ready, able, and skilled for when the downturn ends.”They have already made an impact.

“It has prompted a number of compa-nies to increase investment in Alberta, or announce they plan to do so when the busy winter drilling season picks up,” says Gary Leach, executive direc-tor of the Small Explorers and Produc-ers Association of Canada (SEPAC).The drilling incentives in particular have already made a difference in the junior sector, he says.

“They’re going to help with generating some additional cash flows so these companies can continue drilling; it translates into jobs for Albertans.”


Looking forward, a competitiveness review of the industry is currently be-ing conducted by the provincial gov-ernment. The report should be made public by the end of December, ac-

cording to Jerry Bellikka, spokesman for Alberta Energy. While many are anticipating the re-port’s contents, it continues the sense of instability, according to Angevine.

“That report is due to be finished in the fall so people aren’t just sure where we’re headed. There’s a lot of uncer-tainty and a lot of unhappiness over the royalty question in Alberta.”It’s a fine balance, says Bellikka.

“We’ve heard from a lot of people in the last few years who felt that Albertans weren’t getting their fair share of roy-alties. At the same time, we’ve heard from companies who say ‘we can only afford so much before development is not economically feasible,’ so we’ve tried to strike a balance between those two.”

Industry will be watching carefully.

“All provinces have an awareness of

how important this is. They are aware

that capital is mobile, that companies,

on behalf of their shareholders, have

to invest where they get the best rate of

return,” says Leach. “Sometimes just

one, two, three per cent on an invested

dollar has a huge impact.”

Though the changes in 2007 were

aimed at giving “stability and pre-

dictability to the oil and gas indus-

try” according to Energy Minister Mel

Knight’s introduction to the New Roy-

alty Framework, he has publicly said

since that the government will make

more changes if necessary after the

competitiveness review is completed.

However, in order to encourage more

investment, particularly from big in-

ternational companies, “there’s a trust

element that needs to come back,” says

Kapusta. “I think that’s certainly been

damaged over the last couple years.”

There certainly seems to be a degree of

bitterness out there and a great deal of

unhappiness on the part of the industry.

~ Gerry AngevineCo-author of Global Petroleum Survey

The Alberta government has scaled back

some of the royalties that hit the oil and gas

industry hard, and some say it has helped

the situation somewhat, but the slowdown

of activity in the province has continued

right into the fall.


British Columbiaholding its ownIn 2008, the situation in B.C. was downright rosy but tighter economic times this year have altered things somewhat.It could otherwise be the perfect com-bination: plenty of previously locked-up gas finally accessible and cheap royalties to boot. A heavily natural-gas weighted prov-ince, B.C.’s revenues have taken a hit. The budget, released in September, forecasts a $2.8-billion deficit – a re-cord for the province. It’s mostly due to a loss of $2 billion in revenue, Fi-nance Minister Colin Hansen said when announcing the budget. The royalty incentives will benefit both the industry and the provincial revenue, says B.C. Energy Minister Blair Lekstrom.

“The future will really tell how the lat-

est stimulus package works but history

shows us that for every dollar we in-

vest in royalty incentive and stimulus

like we brought forward, the Crown

gets a return of about $2.50,” he says.

“It’s an exceptionally good investment

on behalf of the people we represent.”

Particularly during the tough econom-

ic times, royalty breaks make it pos-

sible for companies to operate when

they might have otherwise opted to

wait out the downturn.

“Two per cent of something is better

than 18 per cent of nothing, that’s

how we look at that.” Lekstrom. “It

stimulates the industry’s ability to in-

ject capital into B.C.”

Lau rates B.C. second out of the three

provinces.

“The reason is they have some gas plays

up there that still make sense at these

low prices and, on top of it, B.C.’s roy-

alties being ratcheted down, that re-

ally helps their economics too.”

B.C. reduced its royalty rates in March,

the day before Alberta’s incentive pro-

gram was announced. The province of-

fered reduced rates for wells drilled be-

tween September 2009 and June 2010

– from 20 per cent down to two per

cent. Royalties on some new conven-

tional gas and oil wells were reduced

to five per cent or less for at least a year.

In August, rates on all wells were re-

duced to two per cent until June 2010.

In the Global Petroleum Survey, only

two per cent of those surveyed said

B.C.’s fiscal terms were a strong deter-

rent to investment. Alberta received a

38 per cent rating.

Phil Geiger, president and CEO of Ca-


nadian Spirit Resources Inc., a junior

company with two unconventional

gas joint ventures in the province,

calls B.C.’s royalty structure “fantastic.”

“The B.C. government has really re-

sponded to industry. That’s what you

have to do if you’re the government.

You have to give people a reason to

drill.”

B.C.’s drilling is down 18 per cent this

year, according to PSAC projections.

“Things are still down, but they’re

nowhere near as down as they could

have been without that type of fiscal

encouragement,” says Geiger.

In addition to the two per cent royalty

rate and infrastructure credits, B.C.’s

royalties include an increase of 15 per

cent in the existing royalty deductions

on natural gas deep drilling and ex-

tend the deep royalty credit program

to include horizontal wells drilled be-

tween 1,900 and 2,300 metres.

But, of course, the natural gas price

rears its ugly head again.

EnCana, for example – North Ameri-

ca’s largest natural gas producer – has

reported that its Horn River shale gas

property needs prices of at least US $6

per 1,000 cubic feet to be worth sell-

ing.

“If companies are too heavily weighted

in the natural gas business – which

last year looked like a really great place

to be – they’re still struggling because

natural gas is still really low,” says

Leach.

B.C. had recorded $300,000 in land

sales by September, down significant-

ly from record highs of $2.6 billion in

2008.

The province is looking forward to bet-

ter times. When it comes to the shale

gas, Lekstrom doesn’t mince words.

“We think it will secure our economic

future, without question,” he says.

“When you look back three, four, five

years ago, it was not technically pos-

sible,” says Leach. “There are huge

amounts of natural gas locked up in

shale rock, and only in the last two

years has horizontal well technology

matured to the point that you can ex-

tract commercial quantities of gas

from shale rock and it’s been a huge

success.”

The only problem is that the new tech-

nology is costly.

“We probably need prices that are dou-

ble what they are today to consistently

have people investing enough money

to meet the demand for gas,” says

Leach.

Gary Leach of SEPAC says new horizonal well technology has made

some shale gas plays more accessible, but because it’s costly, a re-

bound in natural gas prices is needed before exploration companies

will really kick into high gear.


Oil’s well that ends well in SaskatchewanSaskatchewan is making a name for itself as the sturdy province of the year. Its oil-heavy resources are holding fairly steady, buffeted from the winds of the bottom-of-the-barrel natural gas prices. It’s still not the perfect year

– drilling is down by 45 per cent, ac-cording to PSAC – but the province is keeping its head up.Saskatchewan has done very well this year under the circumstances, says Lau.

“The reason is that Saskatchewan is the oiliest of B.C. and Alberta.” Though oil prices took a hit early in the year with prices dipping below $40 a barrel, they have steadily in-clined since, hovering around $70 in September.

“Saskatchewan is doing very well now,” she says.It’s also creeping out of the shadows as a Western Canada industry contender.

“Saskatchewan made more than Alber-ta in land sales (this year) which was absolutely unheard of,” says Lau.Success in Saskatchewan comes down to three basic stories: its concentra-tion of oil, the Bakken play and an un-changing royalty program.

“I wouldn’t say there’s anything wrong with Saskatchewan,” says Howard of CERI. Development is higher in the province because the royalties are “favourable” there, he says. Many junior oil companies are thriv-ing.

“In Saskatchewan we’re not looking for a change, we’re actually quite happy,” says Carl Henneberg, chairman of the Saskatchewan Committee for SEPAC. Though he says the province was not investment-friendly for years, it woke up to realize the revenue potential in the mid-1990s, lowered its royalty rates and kept them there.

“They’ve been able to keep things pret-ty stable,” says Henneberg.Ed Dancsok, assistant deputy minister of energy in Saskatchewan, says there are no plans afoot to change the royal-ties.

“We want to show that we have a stable regime under which people can make investments with the certainty to know what their return is going to be.”The royalties make sense, says Hen-neberg. A lot of the wells drilled in southeastern Saskatchewan are hori-zontals and there’s a royalty-free pe-riod to allow companies to recapture their initial drilling costs.

“I think the Saskatchewan government has really got a balance between what the drillers need to continue to drill and what the province needs to obtain revenue from that resource,” he says.It’s not to say Saskatchewan hasn’t felt the financial crunch. There were 4,045 wells drilled in 2008, says Dancsok. This year, only 1,092 were drilled by mid-September.

“We knew eventually it would have to happen. It’s a cyclical industry we live in,” says Dancsok.

Investment dollars echo the drilling. In 2008, the industry invested $4.8 billion in capital spending on oil and gas. In 2009, a forecasted $2.7 billion will be spent.It’s almost unfair to compare a boom year to a downturn year, says Dancsok, pointing out that in 2007 there was $3.1 billion in spending – the prov-ince’s best-ever tally at that point.There’s been a lot of press about Sas-katchewan, which nabbed the number two spot in the Global Petroleum Sur-vey. In 2008 it was number one.

“We always knew here that we had a very strong regulatory regime that would be attractive to industry should they really choose to come and try us out. Of course, the richness of Alberta and B.C. kept the industry there but now with the Bakken play and other emerging plays, industry is realizing there is a resource in Saskatchewan,” says Dancsok.


The big story in Saskatchewan is the

Bakken oil play – a massive rock for-

mation beneath Saskatchewan, Mani-

toba, Montana, and North Dakota.

“(The Bakken is) what’s driven things

around here. It’s been a blessing. We’ve

waited long enough in Saskatchewan

to make some noise and this is our

turn,” Dancsok says.

Bakken oil estimates from Canadian

and American scientists run from 100

billion barrels to 400 billion barrels.

“Saskatchewan’s known and proven

conventional oil is 43 billion barrels,

so (the Bakken) is a pretty big prize

out there,” says Dancsok.

Over the past four or five years, Sas-

katchewan has estimated about a bil-

lion dollars in land sale revenue just

for the Bakken area. Production from

the play was about 600 barrels a day in

2004. This January it was putting out

57,000 barrels a day.

“In five years, that’s quite a growth,”

says Dancsok.

Henneberg operates a junior explora-

tion company in the southeastern part

of Saskatchewan. He says the biggest

challenge right now is finding pipeline

space for all the oil they’re producing.

“It’s a good problem, everybody’s do-

ing well and drilling lots.”

Despite each province’s troubles, the

future is looking brighter as the indus-

try rides into the last months of 2009.

Projections for oil and gas prices are

all upwards, royalty incentive pro-

grams are cushioning the blows from

the world market and proclamations

of the recession’s end are starting to be

widespread.

The U.S. Energy Information Admin-

istration (EIA) forecasts gas prices to

rise 15.5 per cent in 2010, moving

from US$2.34/gallon to $2.70/gal-

lon. Crude oil prices are expected to

rise 20.5 per cent from an average

US$60.12/barrel in 2009 to US$72.42/

barrel in 2010. Investment is forecast

to pick up and Canada’s economy is

expected to grow by 2.7 per cent in

2010, compared to a global average

of two per cent, according to Alberta’s

Energy Outlook portion of the prov-

ince’s 2009 budget. Global oil demand

is expected to return to regular growth

rates in 2010, according to the U.S.

EIA’s International Energy Outlook 2009.

These numbers come from the experts

and if their predictions prove true, the

brutal truths soon won’t be so brutal

for the oil and gas gamblers of West-

ern Canada.

www.slickworldonline.com

Arlene DickinsonShe’s taken her own advice well

Arlene Dickinson, president and CEO of Calgary-

based Venture Communications and one of the

Dragons on CBC’s Wednesday night phenom, the

Dragons’ Den, has carved out both market share and one

of the most effective personal brands in Canadian busi-

ness history with the best of the marketing prowess that

has driven her reputation.

Her mantels are full of awards, including her ranking as

one of Profit magazine’s Top 100 Women Entrepreneurs

for seven years running. Her $20-plus million business

has expanded from its Calgary headquarters to include

offices in Toronto, Edmonton and Ottawa, and Dickin-

son’s personal and corporate brand is at a pinnacle.

In this, what will be a regular check-in with the West-

ern Canadian Dragons, as well as Western recipients of

Dragon funding, editor Kathryn Engel (who finds the fact

Dickinson’s initials create the word ‘ad’ poetically appro-

priate!) accomplishes the rare feat of catching up to the

marketing guru who tells Slick World now is not the time

to put the brakes on marketing.

ke: you’ve been outspoken about your emphatic belief in the importance of intelligent, bottom-line marketing. why has that been such an important theme to stress right now?

AD: There’s empirical evidence of businesses who not only stay

the course but increase marketing efforts through recessionary

periods and what they get from that, that points to the fact that

not only you should do it but you have to do it – you do better

than anyone else through the recession but also for the two or

three years following the recession as well.

Cou

tres

y C

BC

slickworldonline.comslick world84

showing courage through that and tell-ing people, ‘Yes, things are bad but we have a strong way forward and we’re going to get through this and we’re go-ing to get through this together and when this is over, we’ll be strong.’

ke: did you always love marketing? tell me about the early years of growing ven-ture.AD: Marketing and good business are synonymous – so what I loved about marketing was being able to tell the story of a business in a way that all the different stakeholders of a business who needed to support it could under-stand. It’s a simple thought to be able to say, ‘Well, let’s help you tell people, help you articulate it so your team can understand it and your public can understand it and your potential con-sumers or business you do business with get you.’ Most CEOs tend to be very operationally- or sales-focused, but they don’t understand what they believe in and their vision is what needs to come out to the world. When people can believe in you and where your head is and your leadership, they will support you. You can find great brands – you don’t need to be the CEO standing up beating your chest but you

need to be the CEO who is really good

about explaining what your business

is to anyone who needs to do business

with you. So I loved marketing and I

loved what it could do and I felt like it

got dismissed as a kind of advertising

function and it’s not. It’s about taking

your business to the marketplace.

ke: tell me a bit about how we are doing for a canadian brand in business. i just returned from south america where i was inundated with the same theme over and over about how much they love do-ing business with canadians.

AD: Canadians, I describe Canadians

in business as pragmatic and simulta-

neously optimistic – we have hid our

light under a bushel for many genera-

tions because Canadians tend to be

less of a stand-up-and-shout nation.

However, I sense Canadians are feel-

ing much more confident about their

values and the things that separate

them from the U.S., in particular. That

is becoming more clear, so I feel we

are a nation coming into its own. We

don’t have the population or history

of some of the countries in which we

may be doing business, but what we do

have is a natural resource in terms of

... our entrepreneurial spirit, kindness,

ke: and yet, there is so much fear about the economy; you find people want to pull back as a result.

AD: Yes. I know that is a hard thing

to hear when everyone is cutting and

everyone is looking to save money. It’s

hard to say continue to spend and in-

crease in marketing when they’re look-

ing to cut back but, in fact, it is the

exact thing you want to do because in-

stead of focusing on the 10 per cent of

the market share you’ve just lost, you

want to focus on the 90 per cent still

available to you.

ke: describe the current culture around a strong brand; how is a strong brand responsive to the current culture of con-sumer fears about the economy?

AD: The consumer is looking for a

brand that believes in itself and helps

them see a way past this current situ-

ation and one that doesn’t get stuck

in it too – you don’t want to look at a

brand and wonder, ‘Hey, are they go-

ing to make it out of this, how are they

doing, are they confident?’ Consum-

ers want to believe, and they want to

believe you have a brand that can see

the future and understand the future

enough to not be afraid of what is go-

ing on currently. I am a big believer in

Wik

imed

ia C

omm

ons

85slick worldslickworldonline.com


generosity, understanding of human nature and then, of course we’ve got this natural beauty, and natural resource called Canada as a country. I feel like we are like teenagers, we went through this awkward stage for a long time and – hey, you’ve got me passionate about something here – we are just about to hit our stride and I really do feel Canada’s time is coming.

ke: on that note, do you sense, in your role on the dragons’ den and with the young entrepreneurs you deal with all the time, are they starting to step out internationally with that evolving identity or what are some themes you’re finding?AD: Yes, that’s one thing I tell people lately. I’m really en-couraged by the level of intelligence and global thinking by the young entrepreneurs I see. I am constantly blown away by late 20s individuals striving for the ability to compete anywhere in the world. The days of growing a business in your own backyard first have changed – you don’t necessarily have to grow here first to be successful

– you can start here and stay here, but (now there’s also) selling to markets around the world and that’s what tech-nology has given us. So yes, I’m very encouraged when I talk to young entrepreneurs when they see that and are thoughtful about it and know they can do anything –

ke: - have a global mindset?AD: Right, exactly. They are world citizens. They’re not just in business but they actually care about what’s hap-pening across the globe. You know, it really strikes me how people who really understand and are proud of their country are able to take that pride anywhere – they can take values of their country and who they are and still do work anywhere in the world. One always wishes resources stayed in Canada – that needs to be encouraged more, es-pecially in technology and global opportunities, but I’m an eternal optimist.

ke: i’m sensing that eternal optimism has boded well for you. do you list it as a main ingredient for success in business when you’re dealing with young entrepreneurs?AD: You just have to be one – you just have to be a cup half-full kind of person, without being blind. Blind pas-sion gets you nowhere, I personally tell people you have to be passionate with thought behind the passion.

ke: in the time period in which you’ve grown your marketing business, when you reflect back do you feel we are getting the message of the necessity of, and direct correlation between, good marketing and good business? is it now more of a given in operational budgets for that reason?AD: You know what, I am going to say no generally to that. I would like to say yes but I really don’t think market-ing has been elevated the way it needs to be in business schools, and business in general. To me, you talk about triple bottom line businesses – to me that’s a crucial mar-keting thought. When a business understands its social environmental and economic issues are all really pillars of a good business – telling that story isn’t about telling just the social side or ‘Look, we’re green now,’ or, ‘We do good business because of this.’ It’s about wrapping that story as something compelling as a whole. I really don’t think people are getting that. There are many businesses, unfortunately, who dismiss marketing as something they don’t understand the value of and don’t believe necessary. Or they know they need it but can’t understand it and why they need it – and I think that is as much our fault. Marketers haven’t done a good job of elevating why it’s important. It has been wrapped up in an advertising prob-lem, which is not the issue exactly in marketing, it’s about the whole.

www.cbc.ca/dragonsden

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Parting Thoughtslionel frey

I was reading a business column not long ago that re-

ported the biggest concern for many CEOs within the

country was that we maintain our strong trade rela-

tions with the United States.

In fact, 60 per cent of Canadian CEOs polled shared this

stance. I don’t discount the fact that the U.S. has, and will,

continue to play a significant role in Canada’s ongoing de-

velopment; but after some developments within our own

company, Slick International, over the last several months,

the statistic just struck me in a different way from what it

would have even a short time ago.

Six months ago, I admittedly didn’t quite realize the ex-

tent of opportunities that lie beyond North American bor-

ders. It’s not that I was naïve to the future influence of na-

tions such as Brazil (particularly with the 2016 Olympics

now confirmed), India, China, Russia, Mexico, or South

Korea to name a few; but, the world has certainly opened

up since working directly with people in some of these

developing nations. Not to sound like a cheap cliché, but

it makes you realize that this is a small world after all and

it has certainly changed my perspective on business.

Over the next several years, I believe many Canadian

companies will come to share that perspective in realiz-

ing that the world is truly their market. To some degree,

development in technology taught us this point; but what

the recession has truly shown us is that nothing will ever

supersede resourcefulness in a business.

The reason some of these countries are being talked about

so much is because they are becoming more of a consider-

ation in the ongoing business development of companies

that traditionally would have been satisfied to remain in

smaller markets, especially while the boom times of pre-

vious years prevailed.

We have seen what maintaining the status quo can do.

Media empires collapse, largely because of not being re-

sponsive to changing circumstances that may have been

interpreted as mere fads and not trends. Smaller indus-

trial companies had convinced themselves that the only

market for their product or service is in their backyard.

Maybe they’re right, maybe not.

The point is it can pay to think larger than life. It pays to at least be educated on what and where the opportunities are, and to not simply base decisions on how the past has operated.When we started this magazine, some people told us we were crazy.

“Why would you start something like this now?” was the occasional inquiry. This was coming from companies who were spending ex-actly zero dollars on marketing, and watching what they had worked so hard to build over the previous several years gradually shrink before them; yet, were paralyzed from taking action because they didn’t know how to go about changing their fortunes. While some may react to this type of comment with dis-couragement, we actually relish it because we know that there is a future for anyone willing to stretch their bound-aries. We have seen it internally, and we see it in other nations more and more.The United States will incontrovertibly be an ongoing in-fluence of what we do in Canada, but the moral of the story is to never be afraid to push your boundaries. It’s scary sometimes, but then again it isn’t. If you believe in what you’re doing and, more importantly, believe that your clients – wherever they may potentially lie – will benefit in what you’re doing, it won’t matter what others believe. Don’t sell your company short and don’t fall in the trap that history knows best. When it comes to your business, history has yet to be written and the pen is in your hands.

For more than 12 years, Lionel Frey has worked in business development in a variety of capacities. He has assisted start-up enterprises with busi-ness and strategic plan-

ning, financing, cash-flow analyses, and financial fore-casting based on market information.

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P R O M O T I O N

“The town of Beaverlodge is one of the first municipalities in Alberta to adopt multi-chip LED lighting. As a result of their forward-thinking town council, Beaverlodge will put another $5,000 per year back into the town’s coffers through a 15-light initial case study. That money can now be allocated to other projects for the community. Also in the works is the design of a state-of-the-art recreation centre. Plans are to include a myriad of green initiatives that will save additional monthly expenses for decades to come – freeing money that can be used to fund other projects for kids, infrastructure, etc. Currently, there are a few other municipalities with a similar mind-set, and it is key that residents of these towns back these initiatives in order to maximize their tax dollars.”

~Travis George, President

Having always been into alternative energy, Travis George knew that the leap of amalgamating his concern and appreciation of the environ-ment with a truly green energy sav-ings technology wasn’t that much of a leap after all.

“Everyone wants to do something good for the environment, let’s face it. But when it makes complete fiscal sense to do so it’s easy for business and government to implement this truly green solution,” says George, one of the founders and President of Defiant Energy specialists in the sales of second generation multi-chip LED commercial, and high power outdoor lighting.

The company, only a year old to this point, has already made significant inroads with businesses, industry and municipalities interested in sav-ing significantly on lighting costs, while serving the environment at the same time. In fact, the company will save users 80% on their monthly and annual lighting costs with their multi-chip LED technology.

“We can walk into a business and show them that we will save them 80% on their energy usage pertain-ing to their lighting. Besides that what is great about multi-chip is all of our products are serviceable un-like current inefficient lighting and first generation LED’s which are both throw away technology that pollutes our groundwater with lead, mercury and phosphorous and un-necessarily puts a burden on our landfills.

“It makes the most sense for the big guys that are using high voltage lighting.”

George outlines a case scenario for a large operation that may spend hundreds of thousands on a retrofit of their lighting to switch to multi-chip LED, but save over $15,000 per month on their bill as a result. Within a few years, the retrofit has paid for itself. After that you have healthy maintenance-free light that uses 80% less energy for the next 10 years at least, backed with a five-

year warranty. So it makes a lot of sense financially, environmentally, and most importantly, socially. This is what is winning many clients over, particularly when it comes to more challenging economic times for business. This solution makes so much sense.”

According to George, the strategy is literally paying off for both his company and his clients, although he would like to see the government of Alberta at least make an effort to reduce consumption of energy be-fore force feeding taxpayers higher energy rates for huge unnecessary grid upgrades and large transmis-sion lines they are planning at a cost of 20 billion dollars. “We all know (this) will be passed on to both con-sumers and taxpayers which just do not need it in already tough times. Alberta is the only province that has nothing as far as Eco-energy grants.

“In British Columbia, a company can have the retrofit paid up to 80% by BC Hydro, with the remaining 20%

A GREENER FUTUREDefiant Energy Solutions is committed to mak-ing the world a greener place, especially when it makes so much sense to do so. The gap in technologies from tube-type lighting to solid-state is so large there really is no comparison. When our 100W Multi-Chip LED is 6-times brighter than a 250W Metal Halide Bulb, why do we still use bulbs? When there is enough mercury in one fluorescent tube to contaminate 20,000 litres of water, why do we still use these? The energy savings using our Multi-Chip LED easily offset the cost, effectively putting money back into your business.

Defiant Energy Solutions has a replacement for every type of light fixture on the market, with additional new innovative products on the way. The revolution is just starting towards “a green-er and more efficient future.”

Defiant Energy Solutions has a simple goal: To accelerate the inevitable adoption of Multi-Chip LED solutions as the new standard for lighting in Canada by combining Power Smart approved products with innovative tools that will enable our clients to take advantage of the growing number of incentive and retrofit pro-grams offered by Hydro authorities. With a solid network of Energy Management Consul-tants, we can provide expert onsite consulting and support services before and after the sale. Ultimately, we want our clients to start saving energy and money today, not wasting resourc-es on “disposable technology”, but embracing our long-lasting efficient lighting solutions and “illuminating a greener future” for themselves.

DEFIANT ENERGY

financed over three years. This is because British Co-lumbia is visionary enough to realize that everyone will ulti-mately benefit from this.”

Another factor George in-cludes in his approach with clients is the safety and man-hour savings that can be seen, which he admits is something business sometimes over-looks when weighing against the direct savings from the technology.

“From the man-hour and safe-ty standpoint, now having no need to climb ladders or rent lfts to switch out the all-too-common burnt out light, which have literally over a decade less life than the multi- chip LED lighting, essentially eliminating safety and mainte-nance concerns.

In a short period of time, the company of six has plans to make many more inroads

throughout Western Canada, as well as abroad. Defiant is mobile and doesn’t need a lot of overhead to operate, as it works directly with the manu-facturer on the distribution of the LED product to custom-ers, passing further savings on by cutting out the need for wholesalers.

“We’re going to start in West-ern Canada because we feel the economy is still strong compared to other places. It’s not full-out, but it’s still moving.

“I’m a dreamer and so is every-one else within the company, so yeah we have a vision and we think if we execute it right here we will be a driver of the widespread implementation of this truly green energy sav-ing technology , only time will tell what our full potential is.”

Lighting the Future.

9804 100 AVEGRANDE PRAIRIE

ALBERTA

P: 780-518-3841DEFIANTenergy.ca

P R O M O T I O N

P R O M O T I O N

“The town of Beaverlodge is one of the first municipalities in Alberta to adopt multi-chip LED lighting. As a result of their forward-thinking town council, Beaverlodge will put another $5,000 per year back into the town’s coffers through a 15-light initial case study. That money can now be allocated to other projects for the community. Also in the works is the design of a state-of-the-art recreation centre. Plans are to include a myriad of green initiatives that will save additional monthly expenses for decades to come – freeing money that can be used to fund other projects for kids, infrastructure, etc. Currently, there are a few other municipalities with a similar mind-set, and it is key that residents of these towns back these initiatives in order to maximize their tax dollars.”

~Travis George, President

Having always been into alternative energy, Travis George knew that the leap of amalgamating his concern and appreciation of the environ-ment with a truly green energy sav-ings technology wasn’t that much of a leap after all.

“Everyone wants to do something good for the environment, let’s face it. But when it makes complete fiscal sense to do so it’s easy for business and government to implement this truly green solution,” says George, one of the founders and President of Defiant Energy specialists in the sales of second generation multi-chip LED commercial, and high power outdoor lighting.

The company, only a year old to this point, has already made significant inroads with businesses, industry and municipalities interested in sav-ing significantly on lighting costs, while serving the environment at the same time. In fact, the company will save users 80% on their monthly and annual lighting costs with their multi-chip LED technology.

“We can walk into a business and show them that we will save them 80% on their energy usage pertain-ing to their lighting. Besides that what is great about multi-chip is all of our products are serviceable un-like current inefficient lighting and first generation LED’s which are both throw away technology that pollutes our groundwater with lead, mercury and phosphorous and un-necessarily puts a burden on our landfills.

“It makes the most sense for the big guys that are using high voltage lighting.”

George outlines a case scenario for a large operation that may spend hundreds of thousands on a retrofit of their lighting to switch to multi-chip LED, but save over $15,000 per month on their bill as a result. Within a few years, the retrofit has paid for itself. After that you have healthy maintenance-free light that uses 80% less energy for the next 10 years at least, backed with a five-

year warranty. So it makes a lot of sense financially, environmentally, and most importantly, socially. This is what is winning many clients over, particularly when it comes to more challenging economic times for business. This solution makes so much sense.”

According to George, the strategy is literally paying off for both his company and his clients, although he would like to see the government of Alberta at least make an effort to reduce consumption of energy be-fore force feeding taxpayers higher energy rates for huge unnecessary grid upgrades and large transmis-sion lines they are planning at a cost of 20 billion dollars. “We all know (this) will be passed on to both con-sumers and taxpayers which just do not need it in already tough times. Alberta is the only province that has nothing as far as Eco-energy grants.

“In British Columbia, a company can have the retrofit paid up to 80% by BC Hydro, with the remaining 20%

A GREENER FUTUREDefiant Energy Solutions is committed to mak-ing the world a greener place, especially when it makes so much sense to do so. The gap in technologies from tube-type lighting to solid-state is so large there really is no comparison. When our 100W Multi-Chip LED is 6-times brighter than a 250W Metal Halide Bulb, why do we still use bulbs? When there is enough mercury in one fluorescent tube to contaminate 20,000 litres of water, why do we still use these? The energy savings using our Multi-Chip LED easily offset the cost, effectively putting money back into your business.

Defiant Energy Solutions has a replacement for every type of light fixture on the market, with additional new innovative products on the way. The revolution is just starting towards “a green-er and more efficient future.”

Defiant Energy Solutions has a simple goal: To accelerate the inevitable adoption of Multi-Chip LED solutions as the new standard for lighting in Canada by combining Power Smart approved products with innovative tools that will enable our clients to take advantage of the growing number of incentive and retrofit pro-grams offered by Hydro authorities. With a solid network of Energy Management Consul-tants, we can provide expert onsite consulting and support services before and after the sale. Ultimately, we want our clients to start saving energy and money today, not wasting resourc-es on “disposable technology”, but embracing our long-lasting efficient lighting solutions and “illuminating a greener future” for themselves.

DEFIANT ENERGY

financed over three years. This is because British Co-lumbia is visionary enough to realize that everyone will ulti-mately benefit from this.”

Another factor George in-cludes in his approach with clients is the safety and man-hour savings that can be seen, which he admits is something business sometimes over-looks when weighing against the direct savings from the technology.

“From the man-hour and safe-ty standpoint, now having no need to climb ladders or rent lfts to switch out the all-too-common burnt out light, which have literally over a decade less life than the multi- chip LED lighting, essentially eliminating safety and mainte-nance concerns.

In a short period of time, the company of six has plans to make many more inroads

throughout Western Canada, as well as abroad. Defiant is mobile and doesn’t need a lot of overhead to operate, as it works directly with the manu-facturer on the distribution of the LED product to custom-ers, passing further savings on by cutting out the need for wholesalers.

“We’re going to start in West-ern Canada because we feel the economy is still strong compared to other places. It’s not full-out, but it’s still moving.

“I’m a dreamer and so is every-one else within the company, so yeah we have a vision and we think if we execute it right here we will be a driver of the widespread implementation of this truly green energy sav-ing technology , only time will tell what our full potential is.”

Lighting the Future.

9804 100 AVEGRANDE PRAIRIE

ALBERTA

P: 780-518-3841DEFIANTenergy.ca

P R O M O T I O N

FOR SALE

cOntActWAynE LOck780 831 7573

InquIRIESGREG HAGLund 780 831 6094

dELvIn kOSIk 780 831 4697

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Slick World magazine is distributed monthly across British Columbia, Alberta & Saskatchewan, as well as to select international markets. Over 15,000 up-per-management & executives in manufacturing, resource and professional service companies currently receive complimentary subscriptions. To sign up for your complimentary subscription, or to explore advertising opportunities, visit www.slickworldonline.com. This limited-time offer for a complimentary subscription expires April 30, 2010.

Written, designed, produced & printed in Canada.

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