Oil & Gas
A Guessing Game
March 15, 2016 By Corey Taylor
I wrote this column from the back of a Combi Dash 7 with virtually no heat whatsoever (it eventually came on, but it was still very cold).
I was returning from Cambridge Bay, where the wind chill was -50 but a couple hundred people still turned up for the Kitikmeot Trade Show.
Jim Cuddy of Blue Rodeo fame played the venue, which would have had to be much larger to qualify as intimate. We spent several days with some of the nicest people on the planet and anyone that had been to YCB in the ’90s would be astounded at its current level of development.
I never thought I’d say this but the food was fantastic and the prices were quite reasonable – except maybe for the $27 muskox burger, but how many of us can say they’ve had one?
As I shiver here in the back of a smelly (made in Canada) airplane I can’t help but think of the challenges ahead for 2016.
Trade shows on the frontiers of civilization are just one of the measures operators are undertaking as the commodities downturn continues and the price of oil hits lows that the experts said were not even remotely possible just a short time ago.
When the giants like Shell and BP are reporting losses that exceed many countries’ GDPs, where does that leave our little industry bobbing in our sea of red?
The recent statement by OPEC’s secretary general that $10 trillion (yes, with a T) is required in exploration and drilling to meet current and forecast growth over the next few years is certainly one ray of hope, but once again, many operators are falling back on that age-old tactic, relying on luck and hoping for a good fire season (or a bad fire season depending on your point of view).
This current El Niño phenomenon is a good thing in most years for Canada, but can also bring rain to the picnic. A study of snowpack and other indices around the country shows that some areas seem primed for a jackrabbit start on fires while other areas are getting the best skiing they’ve ever had.
If I was a betting man I’d say we will have an above-average season, but I wouldn’t be putting too many eggs in that basket.
What we really need is a morale boost in the way of a big discovery or a massive infrastructure project, but those seem like long shots at best.
What is a prudent operator to do while waiting for the ship to make its ponderous turn towards prosperity? It seems to me we need to keep costs low, don’t stick our necks out too far and focus on quality and safety to keep ourselves on those enviable lists that enable us to work for the discerning clients that actually have budgets to spend.
While some operators out there are reducing rates back to 1990s levels, others seem to be managing to hold steady and are keeping those loyal clients who don’t switch in midstream to save a few dollars.
How long those clients can keep that up when faced with 30 per cent lower rates from operators begging for cash flow is anyone’s guess, but some of them will make it a few more years anyway.
One thing I’m glad to see is that UAVs are still not making the big splash many thought they would by now. Someone told me not long ago that the last helicopter pilot has already been born. This is a startling thought and while compelling, I think there will always be things for manned aircraft to do.
I couldn’t guess at a proportion but from what I have seen, cheaply made drones could carry out large chunks of our current business. At least that’s until somebody flies one onto the White House lawn, whether weighed down with an IED or not.
I am astounded no one has done that yet and feel it’s only a matter of time, with the resulting backlash causing all kinds of issues for those trying to develop that market.
So with no real line of sight on any good news, I am going to fall back on hope that the spring is dry, the rain stays away, the pipelines get built and the prices of all those extracted goods we rely on in Canada make a speedy recovery. It would be nice to have some cheery news to discuss for once.
Corey Taylor is vice-president of Global Business and Product Development for Great Slave Helicopters. Great Slave is a private company with more than 50 helicopters and that 45 pilots operating both in Canada and international locations around the globe.