The World Won’t Wait
Canadian energy firms have much to offer the world. The time is right for them to go overseas
THE REASONS OIL SERVICE FIRMS LOOK ABROAD
for opportunities are legion. The low loonie, the contracting domestic market, the reputation of Canadian technology— driven by world-class regulatory regimes at home—create a powerful pull toward foreign markets.
Kodiak Oilfield Services has ventured as far afield as Ethiopia and Colombia, selling its wireline services. Stream-Flo put its Middle East distribution hub in Dubai, which is just across the water from Iran’s vast emerging market. The Persian Gulf also has strong logistical and energy investment ties to India, an even larger market with a ravenous appetite for energy, and one which the Petroleum Services Association of Canada identifies as a key market. Fracking specialist Packers Plus has set up shop in Argentina, the U.S. and the Middle East to target shale gas. But the risks are also high in countries that are prone to volatile governments, or where the law is regarded as a vague reference point. And then there’s the public relations risk if a firm gets ensnared in political, social or environmental issues—even if they’re not of its own making. Emerging markets are no place for firms that are risk averse. But the rewards can be high, and following Canadian oil producers into new terrain is often a good strategy.
Europe may be the world’s next fracking frontier. If approved, the pending Canada-Europe free trade agreement would eliminate 98 percent of the tariffs between Canada and the European continent. By then Canadian firms should be among the most experienced shale gas operators and service providers in the Americas. The beacon of global markets burns brightly.
Likewise, the synergy between the global energy and defense industries might not seem obvious. But the ConvergX conference in Calgary earlier this year brought together the two industries to develop solutions to common challenges, such as hauling heavy equipment to remote and inhospitable places. Canadian firms are world leaders in both industries, although one sector is almost entirely reliant on government spending, while the other is funded far more with private capital.