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Doing Business in the Oil Sands Industry

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Presentation on theme: "Doing Business in the Oil Sands Industry"— Presentation transcript:

1 Doing Business in the Oil Sands Industry
Presented by: Clark Grue Founder and President, Rainmaker GBD

2 Getting ready to supply to the oil sands industry
What is our unique value proposition? Market space: is there room for us here? Where do we fit in the supply chain? Who are the right buyers? Is my company ready?

3 Who Are We? Founded in Alberta in 2007, Rainmaker is a recognized leader in strategic business development in the energy industry. We work closely with our clients to develop comprehensive market entry strategies, enhance their market exposure and expand their reach internationally. Our team of professionals has assisted hundreds of companies as they explore new markets around the world. Understanding the nuances of each market has been key to our success to date.

4 Western Canada Market Challenges
Access to markets for end product Shortages of professional talent (PM’s, Engineers, etc.) – work share becoming the norm (people and costs) Qualified trades personnel – becoming increasingly scarce Western module fabrication facilities will reach capacity – industry exploring alternative solutions (China, India, US, other regions of Canada, etc.) Material and equipment costs rising – industry looking for additional suppliers (offshore and locally)

5 Industry Evolution As the industry evolves so does the supply chain
From highly engineered to modularization From insulated to collaboration From silos to open innovation From local to international From impossible to probable From dirty to green?

6 Where are the opportunities in Western Canada?
EVERYWHERE Find Them Listen Learn Presentation Growing midstream and downstream- depending on how you group it - northwest upgrades $capital cost estimate 5.7 bill 700mm spent (2012) - field treating- new technology - rail infrastructure - pipelines....Keystone, energy east, diligent pipelines - production of NGL's- forecasts 600 m3 per day out to 2035 -LNG facilities on the west coast, and facilities on the receiving end....names of equipment Oilsands production- Tulio -2.3p/d(2015) to 5.2 p/d (2030) Majority is thermal not mining Conventional oil production 1.4 p/d consistent to 2030 NGL's- declining - forecasts 600 m3 per day out to 2035

7 Path to success Information
Maps, projects, owners, technologies, supply chain, transportation, production, environment, etc Relationships Owner project leads, Engineering leads, Executives, Field leads, Associations, Government officials, etc Trust The industry operates on trust; positively and negatively Success Define success before you begin and use the above factors to arrive at success

8 Strategic Business Plan Execute Plan Supply/Value Chain Executives
Strategy development & who you need to know. Market Intelligence Data Test Tweak Strategy Strategic Business Plan Execute Plan Supply/Value Chain Executives R&D Groups EPCM’s Associations etc… Patrica Nelson – Alberta 661,848 km2

9 Supply Chain Breakdown
PROJECT OWNERS: EXPLORATION AND PRODUCTION COMPANIES Conventional Unconventional - Exploration - Mining - Drilling - In-situ - Processing - Shale Gas PRIMARY SUPPLIERS: CAPITAL PROJECTS - Engineering Firms - Construction Companies - Fabricators - Financing/public markets PRIMARY SUPPLIERS: OPERATIONS - Oilfield Service Companies - Project management - Maintenance

10 Tiers of Suppliers Tier 1: Direct Tier 2: Indirect Tier 3: Other
Supports activities for exploration and extraction – engineering & construction – professional, scientific and technical services. Reliant on capacity of the fabrication/manufacturing sector. Power generators, boilers, heat exchangers, metal tanks, steel pipes and tubes, mining and field equipment, pump and compressor manufacturing. Directly support Tier 1 Suppliers. Construction, transportation, downhole etc. Transportation engineering and engine turbine, power transmission and communication cable manufacturing etc. Encompasses machine shops, warehousing and storage and truck transportation.

11 Key Players Concerned with strategic purchasing to drive positive returns Set rules of engagement (ROE) with suppliers Develops the specifics of each project (meeting challenges) Defines the ultimate needs and challenges of operations

12 Value proposition Product Innovation Design Delivery Quality Price
Support Service Warranty

13 Supplier pre-qualification – General steps
1. Registration Provide in-depth information on the supplier 2. Company information Organizational framework 3. Appropriate certificates & qualifications Proof of health, safety and overview of quality assurance 4. Compliance with company policies Work with the buyers to reach their goals 5. Current workload Outline of projects the supplier is currently undertaking 6. Review of Company Systems - Site visit to supplier’s facility

14 Information/resources
Supplier Readiness Survey: Oilsands – Blueprint for Supplier Success: Oilsands projects map: CURRENT PROJECT INFORMATION: Oilsands Review Navigator

15 Top 10 secrets to success in this market
10. Learn about the challenges of the resource 9. Understand the climate 8. Respect the expertise in the market 7. Learn to sell to engineers 6. Understand the decision maker hierarchy 5. Build support from influencers 4. Establish a presence/ Be in the market 3. Don’t wait 2. Bring solutions, not just products 1. Build trust by delivering what you promise

16 Clark Grue

17 What does this mean? There are lots of opportunities in Alberta but.. You need to have a value added solution... Differentiate 12 to 24 months before first PO... Patient You need a local strategy/investment ... Boots on the ground learn to love and play hockey!... Relationships We have seen, tested or trialed just about everything You may see a PO earlier (less then 12months) but it will be much smaller then you wanted. Downtown and field sales... You must have both.. It's all about relationships and trust

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