Northern Development Funds Energy Services BC Oil and Gas Business Development Initiative

October 31, 2008

Prince George, BC – Northern Development Initiative Trust (Northern Development) announced today a $206,250 grant to Energy Services BC to fund their Business Development Initiative.  This new initiative by Energy Services BC will help British Columbia businesses tap into the lucrative oil and gas sector.

Project Manager Scott Gordon said currently many energy explorers and producers rely heavily on Alberta based companies to provide services and supplies to their BC operations.  The goal is to change this situation.  “The size of the industry is much larger in Alberta,” Gordon said. “Traditionally, the oil and gas industry, the producers and explorers, are based out of corporate offices in Calgary. There has been a natural progression to use people they know.”

The oil and gas industry has become a multi billion dollar industry in Northeast BC; however British Columbians have not seen the full benefits of that.  “Fifty-five to sixty per cent of every dollar spent on exploration and production in BC goes to out of province service providers,” he said. “It’s been studied extensively and everyone is aware of the problem.”  However, he added, most energy companies do have corporate polices stating a preference for using local services whenever possible.

The objective of the Business Development Initiative is to identify BC service providers and the goods and services they provide; identify service gaps and potential opportunities in Northeast BC, compile a database of energy explorers and producers currently working in BC, develop marketing and networking opportunities, and facilitate relationship building between energy companies and the BC service sector.

“It’s all to do with building relationships with the oil and gas companies. They need to understand the businesses in BC and what they can do,” he said. “There will be a service provider database and there’ll be a producer and explorer database.”  In addition to making sure both sides are aware of who is working in the field, he said, they plan to help service providers understand the oil and gas companies’ procurement processes.  “It’s not about building walls, it’s about a fair bid process,” Gordon said.  If successful, the project stands to benefit BC based service companies and the oil and gas sector.

“There was one explorer and producer we spoke to who said it’s more expensive in BC,” Gordon said. “It’s actually more expensive for Alberta companies to bring services to BC.  Some charge a fifteen per cent surcharge for working in BC.”  It’s also important for oil and gas companies to understand there isn’t the same critical mass of services and competition in the BC’s Northeast as in many major Northern Alberta hubs.  Oilfield operations in Northeast BC are often compared to operations throughout Alberta when we should be compared to a similar geographical area such as Northwest Alberta or Rainbow Lake.

Energy Services BC is currently focused on representing companies within the Northeast in this project, however, there is potential to expand to communities west of the Rockies, Gordon said.  “The long term goal of Energy Services BC is to represent the energy industry in BC for the whole province,” he said.

Fort St. John and District Chamber of Commerce President Russ Berling said the timing is right to take advantage of oil and gas opportunities.  “For the last eighteen months, it’s been a really tough industry,” Berling said. “But now they’re starting to come back and start development again.”  If local companies price their services competitively, they stand a good chance of landing contracts in the oil and gas sector, he said.

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About Northern Development

Northern Development Initiative Trust is an independent regional economic development corporation focused on stimulating economic growth and job creation in central and northern British Columbia.

Media Contacts

Janine North                       
Chief Executive Officer
Northern Development Initiative Trust
Phone: (250) 561-2525

Scott Gordon
Project Manager
Business Development Initiative
Energy Industry Services Association of BC
Phone: (250) 262-7515