Business of Energy - August 2019

OF ENERGY

PIPE DREAMS

AUGUST 2019

INDIAN RESOURCE COUNCIL’S STEPHEN BUFFALO ON THE IMPORTANCE OF OIL AND GAS DEVELOPMENT FOR FIRST NATIONS’ PROSPERITY

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OF ENERGY VOL 1, ISSUE 4 | AUGUST 2019

PUBLISHERS

Higher Prices Ahead for Crude Oil and Natural Gas

by David Yager

KAMBI Enterprises Celebrates 20 Years

by Rennay Craats

04 07 11

Indian Resource Council’s Stephen Buffalo on the importance FEBRUARY 2019 of oil and gas development for First Nations’ prosperity

by Melanie Darbyshire

It’s Never Too Late To Start Up

by Chuck bean

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David Yager | Higher Prices Ahead for Crude Oil and Natural Gas

HIGHER PRICES AHEAD FOR CRUDE OIL AND NATURAL GAS

by David Yager

I

t’s been five years since Edmonton light sweet crude fetched above $100 a barrel in July 2014. The average 2014 price for the full year was $94. In the four-and-a-half years since, the average has been just above half that amount at $57. Synthetic (upgraded bitumen) petroleum sells for more, Western Canadian Select (blended bitumen) less.

With everyone preoccupied with oil pipelines, terrible natural gas prices are often overlooked.

In 2014, the Alberta reference price averaged $4/GJ (1 gigajoule = 948 cubic feet). From 2015 to 2019, the same average value was only $1.79.

In 2018, it was a paltry $1.28; $1.42 for the first five months of 2019. Gas powered the industry and provincial treasury for years.

Nobody has any fun since 2014. If you wonder what ails Calgary and its major industry, 50 cent dollars since 2014 explains reduced capital spending, company values and lower wages.

Plus layoffs and punishing downtown office vacancy rates.

Despite this extended streak of economic misery, your writer remains bullish on prices.

Don’t give up now! If this isn’t rock bottom it’s sure close. No matter what you read or what climate activists claim, the world is not going out of the fossil fuel business any time soon.

Carbon free by 2050? Complete fantasy based on available technology and energy options.

While we endure pipeline wars, bad federal policies and endless lectures on how oil and gas have no future, all international data leads to higher demand, production and prices.

For Canada, producing more could remain a challenge. Receiving more for what we’ve got will not.

A recent presentation by oil giant ExxonMobil at an energy conference in New York is illuminating.

Titled “Growing Upstream Value,” the subtitle was “Spotlight on Guyana”; one of the many country options Exxon (major shareholder of Canada’s Imperial Oil) has for sources of future production. All Canadians should pay attention regardless of where their sympathies lie in the ongoing and divisive climate change/fossil fuels/ pipelines debate.

The first main point is Exxon’s oil demand forecast. Under the heading “Long Term Fundamentals,” the company sees continued increases in global oil demand driven by growing population, GDP and middle class. The main markets are transportation fuel and chemical feedstock. Exxon sees world oil demand rising from current levels of about 100 million barrels per day (b/d) to 110-115 million in 2040.

4 • Business of Energy • August 2019

More interesting is where it is going to come from, or not come from. The chart “New Supply Required” showed how much demand will outstrip supply. By 2040, the company estimated 80 per cent of the oil will come from sources that don’t currently exist. That’s over 80 million b/d. Drill, baby, drill.

Calgary-based private equity and research outfit SAF Group released a report shortly thereafter indicating Exxon’s estimated annual decline rate was seven per cent. This means every year the world must replace about seven million b/d of oil production because output from any given well or field is finite and declines continuously. Including growing demand, the world will need an additional eight million b/d for the next 20 years. The subtitle of the report was “A Very Bullish Argument for Post 2020 Oil Prices.”

In the past year, world oil markets have been indifferent to major supply declines from Venezuela, Libya, Nigeria and Iran. These political disruptions are on top of normal decline rates. This is partly because so many oil watchers have bought into the myth that U.S. light tight shale oil will replace any shortfall. Other investors have lost interest because oil is allegedly a sunset industry.

U.S. crude production growth this decade has been phenomenal, rising from under six million b/d in 2010 to over 12 million b/d in 2019. But can they keep it up? Reservoirs in the Permian Basin and the Bakken have high decline rates. Only continued intensive drilling can sustain output. Alberta oilsands mines, exploiting a massive resource base, have no decline rate.

Even if the U.S. added another million b/d of supply each year, where will the other seven million b/d come from?

Canada must pay attention, because more oil will be produced no matter what we do. Exxon highlighted its investments in offshore Guyana in northeast South America. Exxon figures it has found 5.5 billion barrels of oil. It will come on stream in early 2020 producing about 220,000 b/d and increase thereafter.

As importantly, it will be comfortably profitable. The company figures Guyana offshore will generate a return exceeding 10 per cent with oil at only US$40 a barrel. For Exxon this compares favourably with the Permian Basin (10%+ at US$35 a barrel) and Brazil (10%+ at US$40 a barrel).

Exxon is also trying to invest US$53 billion to expand production in southern Iraq. This is delayed because of contract terms and U.S. tensions in Iran. But the oil is certainly there.

Canada also has lots of oil, assuming supportive economic conditions. But frustrated with Canadian pipeline politics and the production curtailment that Alberta employed early this year to pull prices out of the dumpster, Imperial Oil announced in March it was delaying the startup of its new Aspen oilsands development until 2023.

5 • Business of Energy • August 2019

Higher Prices Ahead for Crude Oil and Natural Gas

“

While we endure pipeline wars, bad federal policies and endless lectures on how oil and gas have no future, all international data leads to higher demand, production and prices.

David Yager | Higher Prices Ahead for Crude Oil and Natural Gas

While Canadian pipeline opponents are angry that Trans Mountain is proceeding and are proud of their accomplishments in helping kill Northern Gateway and Energy East, they retain a myopic view of the world. If climate change is mankind’s greatest environmental challenge, solutions must include the 7.4 billion people who don’t live in Canada. In the absence of practical substitutes, oil demand will continue to grow regardless of what Canada does with its domestic supplies.

And companies like Exxon will simply reroute their capital to Guyana or Iraq from Canada, creating jobs and wealth elsewhere. But no matter how many times you say it, far too many don’t care.

“They’re OK. Who cares about Alberta?”

However, this is good for prices. By ensuring some of the world’s largest, secure and most environmentally-responsible oil supplies never get to tidewater, Canada is making it more difficult for the world to find the required additional eight million b/d.

History has proven high prices never choke off demand enough to significantly reduce GHG emissions. If energy costs more there will simply be less money for food, education, health care, shelter and clothing.

This is progress?

Natural gas looks equally promising. In its 2019 world energy forecast, supermajor BP sees global demand for gas rising 46 per cent in 2040 from 2017 levels. One of the main markets is electricity generation. Plagued by dirty air from coal-fired electricity generation in Asia, countries like China and India would love to import more natural gas as an economical and cleaner substitute for coal.

There is no set of circumstances beyond the vivid imagination of climate change alarmists by which solar and wind power can replace fossil fuels for 24-7-365 electricity generation.

Nuclear power is an expensive and unattractive option because of past disasters like Fukushima, Chernobyl and Three Mile Island.

Shell, the major backer of LNG Canada, is so bullish on the global LNG trade it is trying to spend $40 billion to complete its Kitimat export project. This undertaking would remove three billion cubic feet (bcf) per day from the

Canadian market, about 19 per cent of current production of 16 bcf/day. LNG Canada hopes to be shipping product in 2023. This would be the first significant change in Western Canada’s natural gas market in years. Higher prices are assured.

Of course, in true Canadian fashion this project has its challenges. The legislated poverty industry is already in action. The permit for the pipeline to ship gas to Kitimat is being challenged in court.

Serial opponents of fossil fuels claim it should have received National Energy Board (NEB) approval because it might one day be interprovincial, connected to Alberta through the existing cross-border pipeline network. With both the start and end of the pipe in the province, B.C. felt otherwise and issued the permit. The NEB is reviewing the matter.

As Canadian gas struggles because of market access challenges, U.S. gas fetches about $3.25/ GJ, double the average Alberta reference price since 2017. When LNG gets to markets like Asia, it is worth close to $7/GJ. The U.S. has become a significant LNG exporter with the spread between domestic wellhead and offshore market price covering the cost of construction, liquification and shipping.

Canada is the largest and most established gas producer in the world routinely putting up roadblocks to accessing global markets.

Displacing Asian coal with Canadian gas would result in meaningful reductions in worldwide GHG emissions.

In summary, if Canadians could, just for a moment, take a global view of the climate change issue and accept fossil fuel demand is going up, not down, we would be all better off financially – with more money available for R&D into better ways for safer and cleaner oil and gas exploitation.

But so long as partisan politics are more important than common sense, we’ll have to settle for higher prices. Which, thanks to others, B are coming. OE

A longtime Calgary energy policy analyst and oil writer, David Yager is author of his first book: From Miracle to Menace – Alberta, A Carbon Story. For more information, go to www.miracletomenace.ca.

6 • Business of Energy • August 2019

KAMBI Enterprises Provides Drilling Industry MWD/LWD Solutions Locally and Internationally Rennay Craats

I

van Katic has a long and impressive resumé in the oil and gas industry. For decades, he has gained experience and expertise working on projects all over the world. Katic emigrated from Croatia to Calgary in 1991, starting work as an electrical engineer but later garnered hands-on experience in the field with measurement while drilling (MWD) projects.

“We started KAMBI Enterprises in 1999, with the support of Ted and Marge Dumont. We purchased the first MWD tensor tool and worked out of our home garage,” says Ivan Katic, president of KAMBI. KAMBI Enterprises initially began providing MWD rental and maintenance services to directional drilling companies in the Calgary area. KAMBI grew and began adding new clients until there were not enough tools to service the number of new customers. Katic began hiring skilled shop personnel and managers and purchased additional tools to accommodate the burgeoning demand.

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KA MBI EN TERPRI SE S 20TH AN N IVE RSARY

Photos by Riverwood Photography

IVAN KATIC

MARIA KATIC, ANA KATIC, ROCHELLE SCHWAB, GORAN KOVRLIJA, MIKE NOVLESKY, IVAN KATIC, BARBARA KATIC

Outgrowing the home base and in need of an expansion, they purchased a property in 2005 in the Douglasdale Business Park. From there, KAMBI expanded its operations to Casper, Wyoming (with partner Darcy Dumont) and in 2009 to Dallas-Fort Worth, Texas. KAMBI has clients in several thriving markets in the USA, Colombia, India, Croatia, Poland and other locations. In 2018, KAMBI Enterprises established KAMBI USA based in Conroe, Texas, where it provides MWD kits for purchase or to rent.

For the past 20 years, KAMBI has been one of the leaders in providing reliable measurement while drilling services to large and small oil and gas companies. The company specializes in well-bore navigation technology and data logging, while utilizing mud pulse and electromagnetic-based technologies. KAMBI strives to tailor client solutions to the challenges of drilling from straight to long horizontal, multi-lateral to slim-hole re-entry wells.

MWD tools allow oil companies to drill wells with extreme angles and to be more efficient while safely navigating the well formations. KAMBI provides clients with valuable drilling data information in real time, using accelerometers and magnetometers, gamma ray and resistivity sources, and then transmitting that information to the surface in real time or memory stored.

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KAMBI EN TERPRI SE S 20TH AN N IVE RSARY

MWD and LWD data indicate hole inclination and direction as well as formation resistivity and gamma-ray sensibility and helps drillers and geologists to drill optimal oil or gas wells.

KAMBI provides positive pulse MWD tools that use mud column pulses to transmit data to the surface; high-voltage EM tools that use cuttingedge electromagnetic technology that enhance drilling possibilities; near bit technology that provides greater geosteering capabilities for tighter formations; and gamma and resistivity tools that enhance geosteering accuracy inside the formation.

KAMBI has always prided itself on incorporating and developing the latest technology in order to better service its clients. The team stays at the forefront of technology, whether that’s incorporating wireless communication for instant access to information or using better sensors to offer the most accurate data. By implementing the newest advancements, KAMBI’s clients can now drill deeper as the tools can tolerate higher temperatures, and withstand more aggressive vibrations and higher pressure in the wells.

“We can access the formations that 20 years ago we couldn’t, not only with drilling but fracturing and extracting the carbons,” he says.

The combination of technology, product development, exceptional service and expertise in the field has made KAMBI a reliable drilling industry provider. While it may be a small business, it offers a huge wealth of knowledge for its clients. The staff is experienced in a variety of areas; whether it be through the utilization of fast-updating gamma logging EM tools or slim-hole energyefficient mud pulse systems, KAMBI is up for the challenge.

The company has a small group of field consultants who have proven themselves over time and can be counted on to represent KAMBI’s high standards on site, every time. In fact, it’s the company’s reputation for integrity, professionalism and quality that has made it a go-to firm for clients, especially those with complicated high-profile wells or difficult drilling issues in demanding conditions. No matter what the situation or need, KAMBI can get the job done.

“We’ve worked on more than 2,500 wells over the years, in Canada, USA and internationally.

The great thing is we are a small-scale operation so we can act fast and make quick decisions. We’re available to our clients 24-7,” says Goran Kovrlija, operations manager for KAMBI Enterprises.

Being an agile operation means the company can adapt to the rapidly changing business environment in the oil and gas industry without missing a beat. That has been critical to survival in Alberta’s ever-changing oil and gas sector.

KAMBI also diversified its markets and is working with more international projects in order to weather the storm. With equal parts creativity and hard work, the team has been able to successfully navigate through the past recession.

“If you can’t make money you have to save money. You have to know what you can spend and what you can’t,” says Katic.

KAMBI has been able to reduce its overhead without sacrificing the quality product and service for which it is known. Despite the industry downturn and uncertainty in the Canadian marketplace, KAMBI is committed to continually providing industry-leading MWD services worldwide while helping oil and gas companies at home and abroad prosper again.

downhole technologies

To the team at KAMBI, Congratulations from all of us at RIME.

RIME DOWNHOLE TECHNOLOGIES 501 Winscott Rd. Benbrook, TX 76126 817-923-1776 www.rimetools.com

Drill On Target Directional Services Inc. 14, 10672-46 Street SE, Calgary, AB, T2C 1G1

403.243.4455 enquiries@dotdrilling.ca www.dotdrilling.ca

Congratulations on your 20th anniversary KAMBI Enterprises Inc.

CONGRATULATIONS to KAMBI Enterprises Inc. on 20 years of success.

Kambi USA LLC

410 S. Trade Ctr Pkwy A-12 Conroe Tx 77385 713-715-8720

KA M B I E N T E R P R I S E S 2 0 T H A N N I V E R S A RY

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“Oil and gas has put this province, this city, on the map and the drilling industry has a lot of respect for Canadian companies. That’s a big deal,” says Kovrlija.

It’s just a matter of time before drilling in Canada picks up again, and when it

does companies will look to the reliable, professional team at KAMBI Enterprises to move their drilling projects forward. KAMBI has served Canadian oil and gas companies for 20 years; they would like to thank their clients, suppliers, employees, and field personnel for their continuous support.

KAMBI Enterprises Inc. 11981 – 44th Street SE Calgary, AB T2Z 4G9 | 1-866-96KAMBI (965-2624) | www.kambi.ca

JORI INTERNATIONAL LTD. Customs broker and freight forwarder.

CONGRATULATIONS KAMBI ENTERPRISES INC. It has been a privilege partnering up with you in all our ventures all over the world. Looking forward to walking along with you for another 20 years.

Congratulations to KAMBI Enterprises Inc. on 20 Years of success!

IONOS DIRECTIONAL SERVICES COLOMBIA www.ionosdirectional.com

“

AVT Solid Machining Inc.would like to thank KAMBI Enterprises for their partnership and Congratulations on your success.

”

AVT SOLID MACHINING INC. Bay 3, 4440-75 Ave SE Calgary, AB T2C 2H8 e. avtsolid@telus.net p. 403-723-0284

10–1323 44th Ave NE Calgary, AB T2E 6L5 Phone: 403.571.3200 Toll Free: 1.888.567.4468

Congratulations KAMBI Enterprises Inc. on your 20th Anniversary.

KEYDRILL Technology, LLC

Thank you Canada for making KeyDrill you go to MWD Provider! Please visit KeyDrill.com to learn more about our newest Fast Pulse and EM Technologies.

Manufacturing Services for Oil & Gas, Mining, Aerospace & Infrastructure.

“Thank you, KAMBI Enterprises Inc. for being a part of our success.

Happy 20th Anniversary!’’

Spin-Pro Machining Inc. #2 285005 Wrangler Way, Rocky View, AB T1X 0K3 Email: admin@spinpro.ca | www.spinpro.ca

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KAMBI EN TERPRI SE S 20TH AN N IVE RSARY

Pipe Dreams | Melanie Darbyshire

PIPE DREAMS

INDIAN RESOURCE COUNCIL’S STEPHEN BUFFALO ON THE IMPORTANCE OF OIL AND GAS DEVELOPMENT FOR FIRST NATIONS’ PROSPERITY

A

by Melanie Darbyshire

s president and CEO of the Indian Resource Council (IRC), Stephen Buffalo’s job includes many things. Not only is he advocating for First Nations’ management and control of their oil and gas resources, he is also supporting First Nations’ economic selfreliance; promoting initiatives with government and industry to enhance the economic benefits realized by First Nations from resource development; encouraging greater development and utilization of First Nations’ human resources in oil, natural gas and related activities; and working to transform Indian Oil and Gas Canada (IOGC) into a First Nations institution.

gas development – Buffalo’s work has become increasingly difficult, and essential. For like so many others, First Nations who have relied on oil and gas development for much of their prosperity in the past are suffering.

In recent years – with the drop in the price of oil, the resulting downturn in Alberta’s economy and federal legislation aimed at curtailing oil and

Buffalo is intimately familiar with the effect oil and gas revenues can have on First Nations communities. He’s from the Samson Cree Nation,

“Our communities that produce oil and gas are hurting,” Buffalo laments during a break from the Global Petroleum Show in Calgary, at which he was a speaker and attended on behalf of First Nations oil and gas production and service companies. “They relied on this industry. They relied on that revenue to continue to sustain their communities.”

13 • Business of Energy • August 2019

Melanie Darbyshire | Pipe Dreams

located in central Alberta, which has benefited from oil and gas development since the 1950s.

“It has been something of a learning process,” Buffalo says of the experience. “In the beginning, our people didn’t understand the industry nor did we gain any employment. But, as time progressed, we started to gain a better position to participate. The royalties that we receive are extremely beneficial to the community.”

Indeed, it was with oil and gas royalty revenue that the Samson Cree Nation founded Peace Hills Trust in 1980, Canada’s largest and oldest First Nations-owned federally-regulated financial institution. “Samson Cree had all this money from oil royalties and they wanted to do something to help other communities,” says Buffalo, whose father was instrumental in starting Peace Hills. Buffalo himself worked at the financial institution for 15 years. “They created this trust institution primarily for lending

to help community development. Seeing that we’re able to help other communities is really beneficial for our own community.”

Today, there are 134 First Nations (21 per cent of the total 634) across Canada that are either producing oil and gas, or have the potential.

For those communities, Buffalo says, it’s oil and gas development that can lead to true self-determination. “The trend that I’d like to see – and it’s something that some of our chiefs talk about – is getting away from the Indian Act. That’s the key to all of this. We need our own self-sustainability to be able to create and sustain our own programs with our own wealth; to sustain ourselves away from the Indian Act. We can’t be sovereign when we’re still collecting a government distribution.”

While the Indian Act provides funding for education, health care, social programs and

14 • Business of Energy • August 2019

capital projects, nine times out of 10, Buffalo says, it’s not enough. “Oil and gas revenues have really subsidized many of those programs.”

Since 1974, the exploration and development of hydrocarbons on Indian lands has been governed by the Indian Oil and Gas Act (the act) and its regulations. IOGC is a government agency operating within Indigenous and Northern Affairs Canada, responsible for oil and gas on First Nations reserve lands across Canada, in accordance with the act and regulations.

Since 2009, IRC has been working to modernize the regulations, last updated in 1995. This month, the first phase of amendments relating to drainage, subsurface rights, how royalties are reported, and First Nations’ right to audit will come into force.

“IOGC is supposed to be our fiduciary trustee; supposed to manage our land,” Buffalo says.

“But up until now, the existing act and regulations didn’t properly represent our people and our communities. To be honest, it looked like industry and government were working together to take advantage of some communities.”

Part of the problem, he continues, is the cookie-cutter approach used in the past is no longer applicable. “Some of the communities have oil and gas companies, some have joint ventures and some don’t have anything; they just want to receive the highest royalty,” Buffalo says. “It really depends on where and how you want to make your money.”

The amendments even the playing field between First Nations, industry and government. “It’s very positive for us,” he says. “And we hope it will make it more attractive for industry and First Nations to continue to work together.”

Work has already begun on phase two of the amendments, which deal with the more complex issues of royalty calculation and environmental regulations. “Those are two big areas that need to be modernized,” Buffalo says. “It’s going to get more difficult.”

When it comes to pipelines, Buffalo is staunchly pro. “I wish Northern Gateway was still on the table,” he laments. “We need Energy East. Our products from Western Canada need to move.”

The beleaguered Trans Mountain pipeline, purchased by the federal government last year and approved in June, and its proposed expansion have, in a serendipitous twist of fate, provided an opportunity for First Nations to become pipeline owners.

15 • Business of Energy • August 2019

Pipe Dreams

“

The amendments even the playing field between First Nations, industry and government. “It’s very positive for us,” he says. “And we hope it will make it more attractive for industry and First Nations to continue to work together.”

Melanie Darbyshire | Pipe Dreams

“It was never the intention of IRC to own a pipeline,” Buffalo insists. “The intention was indigenous ownership and possibly our members owning the pipeline. We had all of these ideas but what came to the surface was Project Reconciliation.”

Launched this year, Project Reconciliation is an indigenous-led organization that desires to buy a majority interest in the Trans Mountain pipeline by raising funds through equity markets at no cost to taxpayers. Membership is open to almost 340 indigenous communities across B.C., Alberta and Saskatchewan. A similar Alberta-based First Nations and Métis group, Iron Coalition, launched in June, also wants a majority stake in Trans Mountain.

“Project Reconciliation encompasses indigenous ownership,” Buffalo says. “It encompasses not utilizing Canadian taxpayers’ dollars. It talks about environmental protections. It talks about inclusiveness. If you get a critical mass, and more and more First Nations supporting you, you’ll get more projects completed quicker.”

He’s encouraged by Premier Jason Kenney’s plan to set up an Indigenous Opportunities Corporation this fall, with $1 billion in loan guarantees and other financing, as part of a plan to elevate the voices of First Nations communities that support Trans Mountain.

“Premier Kenney understands that our communities are adamant about meeting environmental concerns, but at the same time, being able to make our own way and get a piece of the economic pie,” he says. “But I’d like to see him go a step further and talk about revenue sharing with the province. I think it would set a precedent. And I think you’d see more and more projects approved if you had a resource revenue-sharing model in place.”

While he commends the resolve of the three B.C. First Nations who have vocally and successfully opposed Trans Mountain, he believes compromise can be reached. “We need to start working together,” he implores. “If there’s

something that can be rectified or can be done to change their position, we need to do it.”

Third-party influences, particularly from the U.S., must be dealt with, he continues, while environmental concerns should not be co-opted.

“The environmental fight is misappropriated in many ways,” he says, “because you’ve got environmentalists trying to speak for our people, which they shouldn’t. At the end of the day, we’ve got to find that balance between economic development and environmental protection.”

He points to other major infrastructure projects in Canada involving First Nations ownership or support, including the James Bay Project (hydroelectric power) in Quebec and the acquisition in January of 2.4 per cent of Hydro One by 129 First Nations in Ontario, as hope for a way forward.

Not surprisingly, Buffalo opposes the Liberal government’s Bill C-69 (the overhaul of the National Energy Board Act) and Bill C-48 (the West Coast tanker ban). “C-69 will wipe any future development right off the table,” he warns. “That’s concerning for us. And with C-48 it’s the same thing. It will prevent the economic development opportunities of communities that want to see these projects go through. It really handcuffs our economic development.”

The support by indigenous senators for Bill C-48 is particularly disheartening. “It’s concerning because those senators are saying ‘Accept the Indian Act. Accept where you’re living.’ I have a hard time with that. Because we need better. We need to do better for our future generations. But if you’re a [Justin] Trudeau-appointed senator, well, maybe you had marching orders, I don’t know.”

Despite all the headwinds and uncertainty, Buffalo is still optimistic about the future – for First Nations and oil and gas development. “It’s important that we start working together,” he says.

“I’m starting to see more and more discussions with industry. We’re bridging the gap to work B together. Because now, we’re in it together.” OE

16 • Business of Energy • August 2019

Chuck Bean | It’s Never Too Late To Start Up

IT’S NEVER TOO LATE TO START UP

by Chuck Bean

I

just returned from Collision 2019 – a threeday tech conference that demonstrates the realization that our world is changing fast. Tech is taking over; AI is coming on strong. Self-driving cars may be still be a dream, but almost every manual process we have today has an AI solution right on its heels.

Collision 2019 showcased almost 2,000 startups and early-stage SMEs; all of which provide a SaaS or HaaS product for a variety of uses. Small display booths were built from particle board and there were no chairs or gimmicks. It was a perfect reflection of how startups should operate.

New Thinking for Oil and Gas So how does our Alberta oil and gas industry play into this? With our rebirthing as a new and improved oilpatch, it means for almost every one of us, regardless of size or position, to be thinking like a startup – a highly-competitive organization that eats like a peasant and performs like a racehorse.

How do Startups Operate?

First and foremost, business is 24-7. Friday does not signal two days off; it signals the upcoming weekend to get work done with minimal interruption so when Monday arrives, they can start fast. Phones are left on most of the time and every call, email and text is treated as a possible lead.

If your startup is building a new tool, service or exploring for new resources, put 90 per cent of your total effort into getting it done, but remember, at some time you are going to have to switch from developing to selling. Every good startup moves to selling and marketing at some point in its life cycle.

Relationships are King!

For startups, everyone is a possible connection – there is never a moment where the startup

is not thinking about opportunity. They realize their success will not come from their product; it will come from people. Building their network and staying coupled is key. They also understand the value of making introductions. The resulting reciprocity can be golden.

Save for What Matters Forget the $80 bottles of wine and $50 steaks.

Startups can’t afford them, and clients will not be impressed. Save your customer meetings for the food truck or hole-in-the-wall diner and pump that cash into other areas. The conversation will be great, and the customer will appreciate your prudent approach to business.

Respect Capital I’ve never met a desk that has made me money, so my advice to startups is make your vehicle your office if you can. It keeps you moving, it reduces your costs and if you need to stop to work, find a coffee shop.

Juggling funds, buying used, leasing and renting are master skills for startups along with planning on a cocktail napkin. Startups are flexible and are ready to roll with the punches.

Probably most important, great startups respect capital and think in terms of maximized utilization of assets. Before they spend a dime, they turn it over and over again. They consider ROI at every turn. Once you have spent your money, you can’t get it back, so being as smart as possible with spending may be your most valuable skill set.

The Alberta patch is ripe for this kind of thinking and if you think that these ideas only apply to small businesses, you are wrong!

Regardless of your size, status or tenure, respecting capital and acting like a startup will give us all faster growth, better returns and B greater business satisfaction. OE

17 • Business of Energy • August 2019

Global Petroleum Show Clean Technology Award winners!

Trido Zero Emission Chemical Injection Pump. + 2800 deployed to date

4 0$ Capital Outlay 4 Reduce Emissions & Costs 4 Increase Compliance & CSR

Lease to own model paid down by emissions offsets - Typical payout < 2 years

LETâ&#x20AC;&#x2122;S TALK 587.747.4077 or info@tricoresolutions.ca

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