ENERGY UPDATE
Sourcing talent Managers are already considering the relocation challenges ahead, Ms Reinhart says. “Companies are looking at BC, even the NWT, asking what infrastructure they need, asking ‘how are we going to get those people up there?’ There’s a lot of upfront planning goes in when they open up a new field or a new project, and part of that is the workforce planning, and ‘how are we going to attract people there?’ That’s the big problem.” Gail Reinhart is working with a couple of companies in
Western Canada with projects in small communities. Things like housing are an issue. “The infrastructure will get built, but it’s the decade it’s going to take to get it all built, the challenge of recruiting people into those locations, especially when you need specific skillsets. “Normally, if you’re going into the north, the NWT, Alaska,
northern Alberta, or northern Saskatchewan, you may be able to steal some people from your competitors, but are you going to be able to steal your entire workforce? Probably not.” Part of the solution might be international relocation, but
the current downturn offers other opportunities. Said Gail Reinhart, “If you look at three years ago, if you
wanted a specific skillset, you were going to have to steal someone, which is probably a very expensive proposition, or you were going to have to recruit internationally. But with the labour market loosening up here because there have been so many layoffs, there are a lot of people out there who are looking for a job right now. But, of course, as the price starts going up and people start getting hired, the pool’s going to dry up again.” Still, she notes, “There’s a lot of recruitment going on from
up from just 2 per cent in 2003, according to estimates from the Royal Bank of Canada. Elsewhere, the NEB and the Northwest Territories
Geological Survey recently said that there could be nearly 200 billion barrels of oil beneath the central Northwest Territories. Even if only a few per cent of the oil is recoverable, it will confirm suggestions that the Canol and Bluefish shales hold up to seven billion barrels of viable oil, putting them on a par with North Dakota’s booming Bakken field. “This should increase the level of investor confidence and
revitalise interest in the Northwest Territories. This really does put wind in our sails,” said NWT Energy Minister Dave Ramsay, ref lecting on the survey. Elsewhere, however, the response has been subdued. With
the oil price low, the cost of extraction in the central Northwest Territories, a region lacking in roads and other infrastructure, may well be too high. Such concerns are exacerbated by tough environmental assessments creating uncertainty around projects. ConocoPhillips and Husky Energy were both exploring
the Canol, but have suspended work in the area in the face of the falling oil price. “We get a lot of press about the LNG projects in (northern
BC), but a lot of those have been postponed, also because of the price of oil. But there’s all sorts of exploration still going on in the Arctic and the Northwest Territories, in Alaska, in the Arctic Ocean. I don’t think that’s going to stop, it’s just going to get pushed back a bit until the price of oil gets to a place where they can make better money on it,” Gail Reinhart, VP of client relations for the MI Group in Western Canada, told Re:locate.
the US into Canada on the oil patch.” At this point, however, much of that remains a concern for
the future. There’s a growing consensus that the oil price won’t be rebounding to early 2014 levels any time soon. “Generally speaking, we think that it will certainly persist
throughout 2016, and it could be of a much more permanent nature,” says David Hargreaves, noting that his prediction matches the view of many analysts. “The days of +$100 might be well behind us.” It’s not all doom and gloom, though. Traditional wells can
make a profit at around $40 per barrel, and the situation for fracking isn’t as bad as it first appears. Mr Hargreaves notes that, when fracking was first becoming commercially viable, firms needed an oil price of around $70 per barrel to turn a profit, but competition has driven them to greater efficiencies, and now the figure is more like $50. That, he says, would be a manageable price, though it would rule out activity in costly locations such as the Arctic. Coming from a relocation perspective, Gail Reinhert broadly
ref lects David Hargreaves’s view that the price needs to be above $50, but says that $60 would be better. “There are some projects that can operate at under $40, but the reality is that you need to make some money in order to reinvest in exploration. I would say that the oil patch will get moving again when we get up to around $60.”
For more on relocation to remote regions, see p34.
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