Canada – oil and gas opportunities for the long-term

Chad Molleken and Robert Vargo of the British Trade Office in Calgary paid a flying visit to Aberdeen city and shire in October to raise local awareness of the significant long-term potential of the Canadian oil and gas market.

During a busy schedule of presentations and interviews, they took some time out to give exportlink a few friendly pointers on why – and how – North East service companies should start looking west...

“Obviously with the global oil and gas market going pretty much flat out, we are aware that markets like West Africa and the Caspian are currently attracting the serious attentions of expansion-minded Scottish oil and gas service companies. We have been truly impressed even during this short visit at the diversity of international markets currently being accessed by Aberdeen businesses.

But there is one really significant reason why these companies should, we respectfully suggest, be considering Canadian opportunities at this current time.

The long-term outlook for Canada’s oil and gas industry is unrivalled in its potential. We have reserves second only to Saudi Arabia, and in twenty years or more we are going to be an even more important global energy powerhouse than we are now. But to make inroads into potential of that magnitude, UK companies have got to start considering their strategic approach now.

We already have a welter of international production capability in Calgary – energy companies from China, Korea, Venezuela, France and many more. Given the undoubted strong cultural links between Scotland and Canada, it might seem tempting to consider Canada as a good natural fit and put it on the back burner for now – but that might well mean missing out on some really significant supply chain opportunities.

It probably is true up to a point that Canadian oil and gas companies are fairly conservative in their approach to oil and gas technology, and have an understandably high regard for tried and tested Canadian oilfield products and services.

But, even for the huge onshore oil sands developments, there are also other Canadian companies who can see the competitive advantage in adapting world-leading North Sea offshore technologies. As in many technology markets, there are both leaders and followers – but to gain market entry even with keen new technology adopters calls for the serious cultivation of strong business relationships, extensive trialling and field testing.

And all of that process takes time, which is why now really is the time for Scottish companies to start testing the Canadian market potential for themselves.

Aberdeen presence

I estimate there are already about twenty Aberdeen companies which are currently active in Calgary – but during the last six months we have fielded calls from many more, so the interest is here for sure.

Our department here in the British Trade Office in Calgary can help in many different ways. Through Business Gateway International, you can commission work from us under the excellent Overseas Market Introduction Service (OMIS). This is very flexible scheme which can range from updating a local market report through to a thorough market analysis, including appointments made on your behalf to meet selected contacts at major trade fairs. (Click here for tips on how to use OMIS).

We are also active in organising trade missions to explore the Calgary market, ideally to coincide with one of our major oil and gas shows. Exportlink readers may already know that Calgary hosts the Global Petroleum Show every alternate June, and there was a significant Aberdeen presence at this year’s show, including a keynote presentation by Aberdeen City & Shire Economic Forum (ACSEF).

But next June sees Calgary host its other major oil and gas show – GO-EXPO 2007, which attracts around 18,000 visitors and exhibitors. UKT&I is hoping to take across a UK trade mission to Calgary to explore supply chain opportunities either in the spring or during June to take in GO-EXPO, according to the preference of our missioners. UKT&I would certainly like to see a stronger UK oil and gas presence at both of these premier energy shows.

Local credibility

Our office in Calgary has been open since 1998, and in that time we have built some good strong relationships with local industry and local government. We have strong credibility, and we know who the serious players are. On trade missions, we can open doors which you would certainly not be able to gain access to under your own steam.

But to maintain that credibility, we also scrutinise the capabilities of UK SMEs in particular to make sure they are not biting off more than they can chew. There is nothing worse than purporting to be market-ready when in reality you are still many steps away.

And finally, a few practical tips for Aberdeen businesses who are serious about targeting Canada:

There is a distinct cultural empathy with Scotland, and you can successfully play the Scottish card. But at the end of the day Canadians like doing business with Canadians!

On the other hand, Calgary is a very welcoming, international city, which is distinctly friendly to outsiders. With such a high Canadian presence now in the North Sea, there is also much more traffic between our two cities than ever before, and therefore more shared experiences and potential contacts.

Don’t get caught out by the time zones. With a seven-hour overlap with the UK, the communications window is restricted.

Canadian safety policies and procedures are often reported to be very highly structured – you may have to adapt your own global procedures accordingly. Don’t necessarily assume they will mesh seamlessly with a UK model.

Our thanks for the hospitality shown to us by the many Aberdeen and Aberdeenshire businesses we met last month during our visit. We look forward to seeing much more of you in the coming months!”

If you are interested in participating in a mission to Canada with UKT&I, please contact Lynn Davie, Aberdeen City Council at: ldavie@aberdeencity.gov.uk or phone 01224 814605.