As Alberta’s economy tanks, oilpatch players eye international forays
CALGARY — The past year hasn’t been kind to western Canada’s oilpatch, but some smaller energy outfits say their international presence has been a rare bright spot.
Shortly after Blue Spark Energy started out in Calgary in 2011, CEO Todd Parker said he wondered whether to “put all our eggs in one basket here in Canada” or diversify into other markets.
The second option turned out to be a good move, said Parker.
The year after its inception, Blue Spark expanded into the U.S. It has since established a presence in Romania, Norway, Denmark, Iraq and Kuwait.
Parker said there’s been strong global interest in Blue Spark’s technology, which uses shock waves to dislodge gunk from oil wells while drawing as little electricity as a curling iron.
As a small player, it was complicated to get things going at first, he said.
“But it’s actually allowed us to ride out the storm and accelerate our growth much faster than if we had stayed within a single market.”
Parker figures about 70 to 80 per cent of Blue Spark’s revenues come from its international operations these days. He’s looking to add 10 staffers to the 30-person workforce by the end of this year — a rarity in an industry that the Canadian Association of Oilwell Drilling Contractors estimates has lost 100,000 jobs in the downturn.
Karl Bauer, sales and marketing director at oilfield service provider Snubco Group, said his company has had to “skinny right up” because of the downturn, but its business in Europe and Latin America has helped it avoid having to cut into its core staff.
Snubco had 145 workers during its pre-downturn peak. Its head count is now at around 45.
“We’d probably, I would say, lose half of them for sure if it wasn’t for some of the European stuff,” he said. “This gives us an opportunity to keep our employees working and get some cash flow coming into the tap.”
“We get to retain them, they get to keep the paycheque and it keeps everything going through the slow period for sure.”
Keeping employees has also been a big priority for Bryce Pinto, president and CEO of Precision Engineering, an Edmonton-based firm that’s been focused on Western Canada for 34 years.
“We’ve definitely had our fair share of pain,” he said. “Our work volumes are down, just like anyone else and that’s kind of why we started looking at other markets.”
Pinto participated in a trade mission to Mexico and Colombia last month and came away with a few leads. But he’s not banking on an immediate payoff.
“You have to take your time and do your homework before jumping in with both feet.”
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Jarl Groothuysen, operations manager at LSC Industrial, made the trip to Mexico and Colombia as well.
The Bonnyville, Alta.-based company provides construction, manufacturing and other services. Groothuysen said he’s working out pricing with a couple of potential customers he met on the mission.
“We kind of chose the best of the best and we’re following up,” he said.
“They need companies like ours down there.”