KUDU Industries Inc.

’s investment
in research and development is
paying off
BLUEPRINT
TECHNOLOGY
WI N T E R 2 0 1 2
PSAC’S 2013 DRILLING ACTIVITY
FORECAST
TAKING ADVANTAGE OF SR&ED
FERUS INC. CONVERTS ITS
TRUCKS TO NATURAL GAS
SERVICES
PM#40020055
PSAC_Winter_2012_p01.indd 1 11/21/12 2:50:35 PM
11
17
21
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3
Features
Departments
4
7
9
22
24
25
26
C
O
V
E
R
CONTENTS
WI N T E R 2 0 1 2
A BLUEPRINT FOR
COMMERCIALIZING
TECHNOLOGY
Innovation and new products drive
KUDU’s business
GLOBAL GIVE AND TAKE
PSAC’s Industry Insights Forum takes
a political look at 2013
FROM FOOTBALL TO FRACKING
A former CFL star tackles the
services sector
11
17
MESSAGE FROM THE CHAIR
IN THE FIELD
News, notes and events from the industry
2013 DRILLING
ACTIVITY FORECAST
Steady business in the Western Canadian
Sedimentary Basin
BUSINESS MATTERS
Research and development pays off
with SR&ED
PSAC IN ACTION
Advocacy initiatives from PSAC spread far
and wide
MEMBER PROFILE
Ferus Inc. converts its trucks to run on
compressed natural gas
A LOOK AT LEADERSHIP
Up close and personal with PSAC board
members Brad Fedora and Scott Hauck
11
WWW.PSAC.CA
21
21
24
25
000PSN-CCI-FP.indd 1 4/18/12 9:17:06 AM PSAC_Winter_2012_p02-03.indd 3 11/21/12 2:52:04 PM
Servic-
MESSAGE FROM THE CHAIR
Lucas Mezzano, PSAC Board Chair
FEEL ECSTATIC ABOUT THE HONOUR of being called to serve you
as Chair of the Board of Directors for the Petroleum Services Association
of Canada (PSAC) for the 2012-2013 year. I have been involved with
the PSAC board now for a few years, and assume the role as chair with
great confidence and excitement about what the year ahead holds for PSAC’s
members and our association. It will also be a challenge to continue with the
great work that our past chairmen have achieved in growing our association and
its role as the voice of the petroleum services, supply and manufacturing sectors.
In the year ahead, our industry will continue to work toward ways of
improving our performance and these efforts will hinge on our collective
ability to find ways to drive efficiencies and cost containment measures
into the entire energy value chain. At the same time, our industry will
continue to innovate and create ways to further limit the footprint of our
operations as an example to the world of sustainable operations. Progress on these fronts will
improve the attractiveness for investors, while continuing to position Canada as an energy leader
on the world stage and our industry as a great place to work and thrive.
While I have no doubt that innovation will continue to positively impact our operational,
safety, and environmental performance, the petroleum services sector and our industry will
continue to work through certain challenges. PSAC’s 2013 Canadian Drilling Activity Forecast
anticipates that drilling activity in the year ahead will be slightly higher than the expected
final count of 2012. The major impacts on activity levels include low gas prices, a scaling back
in capital investment, and capacity issues related to labour shortages. More detail on the 2013
Canadian Drilling Activity Forecast can be found on page 9.
Following the ramp up of efforts in communications and government relations over the past
few years, PSAC will continue to focus efforts in these areas with the goal of raising the awareness
of the petroleum services sector and the issues we face. A key priority will be to continue to grow
the profile of PSAC and its members, and the important leadership role that Canada’s petroleum
services, supply and manufacturing sectors have in innovation and technology development, a role
not always well known or understood.
In addition, PSAC will continue to leverage the relationships that have been formed across all
levels of government, both provincial and federal, to discuss the key issues that members face, and
to work collaboratively with government and our industry peers to map solutions that encourage
future growth and sustainable resource development. We cannot afford to repeat the “fair share”
fiasco when our voice was not heard. It is not enough that we continue the good work we do. We
need to show it and be proud of it, both inside and outside the doors of our respective companies.
In the year ahead, PSAC will also continue to dedicate efforts toward building vibrant
communities which includes continued support of the STARS and Spurs Gala. The partnership
between STARS and PSAC is now entering its 19th year and has raised more than $5 million. PSAC
will continue to take the lead with its Community Partners program, an in-field courtesy program
dedicated to encouraging respectful behaviours such as closing gates and reducing noise. Finally,
PSAC’s Education Fund and the golf tournament held each year, which is the sole fundraiser for
the scholarship program, will continue to support youth education with the goal of building a
future labour pool for our industry.
I look forward to the year ahead, and encourage employees of the more than 250 PSAC member
companies to engage with the association through joining committees or providing regular feedback so
that PSAC can continue to focus our efforts on the issues at the forefront for our members.
Yours sincerely,
Lucas Mezzano
PSAC Board Chair
New Year and New Challenges
I
PSAC_Winter_2012_p04-05.indd 4 11/19/12 4:27:07 PM
WWW.PSAC.CA 5
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WINTER 2012 VOL 12 • No.3
PETROLEUM SERVICES ASSOCIATION OF CANADA
1150 800 6TH AVENUE SW
CALGARY, AB T2P 3G3
TEL: 403.264.4195
FAX: 403.263.7174
PRESIDENT AND CEO: MARK SALKELD
VICE PRESIDENT, COMMUNICATIONS: KELLY MORRISON
COMMUNICATIONS COORDINATOR: LINDA ALDRIDGE
PETROLEUM SERVICES NEWS IS PUBLISHED FOR PSAC BY

VENTURE PUBLISHING INC.
10259-105 STREET,
EDMONTON, AB T5J 1E3
TEL: 780.990.0839
FAX: 780.425.4921
TOLL-FREE: 1.866.227.4276
CIRCULATION@VENTUREPUBLISHING.CA
PUBLISHER: RUTH KELLY
ASSOCIATE PUBLISHER: JOYCE BYRNE
MANAGING EDITOR: STEVE MACLEOD
CONTRIBUTING WRITERS: KAREN PETKAU, LISA RICCIOTTI
ART DIRECTOR: CHARLES BURKE
ASSOCIATE ART DIRECTOR: ANDREA DEBOER
ASSISTANT ART DIRECTOR: COLIN SPENCE
PRODUCTION MANAGER: BETTY-LOU SMITH
PRODUCTION COORDINATOR: BRENT FELZIEN
DISTRIBUTION: JENNIFER KING
ACCOUNT EXECUTIVES: ELLEN FRASER, DENNIS McCORMACK
PRINTED IN CANADA BY RHINO PRINT SOLUTIONS.
RETURN UNDELIVERABLE MAIL TO 10259 105 ST.
EDMONTON AB T5J 1E3.
CIRCULATION@VENTUREPUBLISHING.CA

PUBLICATIONS
AGREEMENT #40020055
CONTENTS © 2012 PSAC. NOT TO BE REPRINTED OR
REPRODUCED WITHOUT PERMISSION.
The Petroleum Services Association of Canada is the national trade
association representing the service, supply and manufacturing
sectors within the upstream petroleum industry. PSAC represents
a diverse range of over 250 member companies, employing more
than 65,000 people and contracting almost exclusively to oil
and gas exploration and production companies. PSAC member
companies represent over 80 per cent of the business volume
generated in the petroleum services industry.
SERVICES
PSAC_Winter_2012_p04-05.indd 5 11/19/12 4:27:32 PM
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Trusted advisers to
Canada’s Energy
Services Sector
For information on how KPMG can assist
you, please contact:
Rhys Renouf
National Sector Leader, Energy Services
(403) 691-8426
rrenouf@kpmg.ca
kpmg.ca
PSCA_8.25x10.75_Apr2012_FINAL.indd 1 4/10/2012 3:59:21 PM
000PSN-KPMG-FP.indd 1 11/2/12 4:41:07 PM PSAC_Winter_2012_p06-07.indd 6 11/16/12 4:39:06 PM
WWW.PSAC.CA
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Trusted advisers to
Canada’s Energy
Services Sector
For information on how KPMG can assist
you, please contact:
Rhys Renouf
National Sector Leader, Energy Services
(403) 691-8426
rrenouf@kpmg.ca
kpmg.ca
PSCA_8.25x10.75_Apr2012_FINAL.indd 1 4/10/2012 3:59:21 PM
000PSN-KPMG-FP.indd 1 11/2/12 4:41:07 PM
in the field
News, events and activities in the industry
PSAC And enform joined forCeS to provide safety updates to approximately 50 delegates
who attended the 2012 PSAC Pre-Drilling Season Meeting in Fort St. John, British Columbia this
September. The purpose of the meeting was to hear from regulatory agencies and the local RCMP
on safety-related issues affecting the services sector. Highlights included WorkSafeBC discussing the
recent increases in signage on B.C. resource roads and the good driving behaviours of oil and gas
sector personnel by using rules of the road and radio calling.
As PSAC was instrumental in the development of the new Lease Lighting Guideline approved
this past June, PSAC invited Enform to provide an overview of the guideline to PSAC members.
The Enform lunch session attracted 70 guests who also heard key updates on industry driver
training courses. The Lease Lighting Guideline focuses on outdoor lighting requirements in outdoor
workspaces, specifcally for: mobilization and demobilization of drilling equipment on a lease
site, ancillary drilling activities, and any lease site servicing operations (e.g., snubbing, cement
pumping, well testing, stimulation, coiled tubing operations, wireline, etc.) For more information
about the new Lease Lighting Guideline visit www.enform.ca.
Enform’s session also provided information on changes planned for the industry’s driver training
courses. Enform discussed reframing the approach to driver training courses, to ensure workers
understand “why” (e.g. why it’s important to do a pre-trip inspection) and leave the “how to” (e.g. how
to do a pre-trip inspection) for job-specifc training. The discussion also touched on how to address
driver fatigue and provided details on tools and courses to assist employers with specifc training
requirements. For more information about PSAC and its safety initiatives visit www.psac.ca.
PSAC and enform Partner to
Shine a light on Safety
PSAC, through itS Education Fund
program, provides scholarships for students
pursuing post-secondary education at technical
colleges enrolled in petroleum-related or trades
programs, especially interested in a career in
the petroleum services sector. Scholarships were
awarded this fall to the following Northern
Alberta Institute of Technology (NAIT) and
Saskatchewan Institute of Applied Science and
Technology (SIAST) students.
nAiT SCholArShiP reCiPienTS:
Sean Brabazon,
Petroleum Engineering Technology program
Daljit Gill,
CNC Machinist program
Mark Tucker,
Heavy Equipment Technician program
SiAST SCholArShiP reCiPienTS:
Amanda Desalchuk,
Welding Certifcate program (2012-2013)
Rob Lesser,
Welding diploma
Kyle Lorencz,
Instrumentation Engineering Technology
diploma
Curtis Ostachuk,
Truck and Transport Mechanic apprenticeship
Terrence Reichert,
Heavy Duty Mechanic apprenticeship
Ryan Taylor,
Welding diploma
Isaac Winter,
Instrumentation Engineering Technology
diploma (2012-2013)
PSAC funds Technical College
Scholarships Across Western Canada
CoMinG eVenTS
CAnAdA’S enerGy TeChnoloGy BluePrinT
BreAkfAST foruM
December 5, 2012
The Metropolitan Centre
Calgary, Alberta
STArS & SPurS GAlA PreSenTed By PSAC
January 19, 2013
BMO Centre, Stampede Park
Calgary, Alberta
For more information visit www.stars.ca
PSAC 2013 SPrinG ConferenCe
April 16 & 17, 2013
Sheraton Red Deer Hotel
Red Deer, Alberta
PSAC Mid-yeAr lunCheon
April 2013
Calgary, Alberta
PSAC eduCATion fund Golf ClASSiC
July 18, 2013
Calgary, Alberta
For more information on all PSAC events, visit
www.psac.ca/events
neW MeMBerS
reGulAr MeMBerS
Downton’s Transport Ltd.
Energetic Services Inc.
ASSoCiATe MeMBerS
Chartis Insurance Company of Canada
PSAC_Winter_2012_p06-07.indd 7 11/19/12 5:05:39 PM
Servic-
Even when the direction of the economy seems to change with each gust
of wind, leaders stay agile and act quickly. From sudden changes in global
markets to dropping commodity prices, we’ve done just that—by continuing
to custom build solutions to help our clients do what they do best…lead.
Because Alberta means the world to us.
atb.com/corporate
TM
Trademarks of Alberta Treasury Branches.
10
years
Living Leadership
Leaders bend but never break.
000PSN-ATB-FP.indd 1 11/6/12 9:32:04 AM
T
PSAC_Winter_2012_p08-09.indd 8 11/16/12 4:39:56 PM
WWW.PSAC.CA 9
Serving Grande Prairie,
Edson & Northern BC
PICKERS & CRANES FROM
17 TON TO 270 TON
www.arcticcrane.com
Grande Prairie, AB
780-814-6990
Edson, AB
780-723-3373
Even when the direction of the economy seems to change with each gust
of wind, leaders stay agile and act quickly. From sudden changes in global
markets to dropping commodity prices, we’ve done just that—by continuing
to custom build solutions to help our clients do what they do best…lead.
Because Alberta means the world to us.
atb.com/corporate
TM
Trademarks of Alberta Treasury Branches.
10
years
Living Leadership
Leaders bend but never break.
000PSN-ATB-FP.indd 1 11/6/12 9:32:04 AM
HE PETROLEUM Services Association of Canada
(PSAC) 2013 Canadian Drilling Activity Forecast
predicts a total of 11,400 wells drilled (rig releases)
across Canada for 2013. This is a slight increase over the
expected final tally of 11,250 wells drilled (rig releases) for 2012.
“We are cautiously optimistic about 2013’s drilling activity levels,”
says Mark Salkeld, president and CEO of PSAC. “The first quarter
will see a typical ramp up of activity, and of course, slower activity in
the spring with break up. However, we expect the last two quarters
of 2013 to bring increased activity as larger producers continue with
their plans and mid-sized companies gain access to the capital they
need.”
PSAC is basing its 2013 forecast on an average natural gas price
of CDN$3.25/GJ (AECO) and a crude oil price of US$95 per barrel
(WTI). “As a result of ongoing suppressed gas prices, our forecast
is conservative for next year’s activity levels,” adds Salkeld. “We are
forecasting that 2013 will see nearly 90 per cent of well completions in
favour of oil, which is being driven by commodity prices.”
Other factors that are likely to impact next year’s activity include
the costs associated with the technology required to drill deeper and
longer wells, and access to capital to support equipment upgrading
and purchasing. “To put next year’s expected drilling levels into
context, the well count is still a 32 per cent increase in activity since
the downturn in 2009,” Salkeld says.
The Canadian Drilling Activity Forecast can be used with the PSAC
Well Cost Study to effectively determine potential drilling and
completion market sizes, as well as pricing and activity direction. For
more information, contact PSAC at info@psac.ca or 403-264-4195.
Oilpatch
Activity to
Remain
Steady
T
2013 DRILLING ACTIVITY FORECAST
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Note: Provincial breakdown does not include
Northern or Eastern Canada.
PSAC FORECAST POINTS
TO CAUTIOUS OPTIMISM
IN 2013
PSAC_Winter_2012_p08-09.indd 9 11/19/12 5:06:33 PM
globalfowinc.com
YOU DECIDE WHERE YOUR NEXT
PRODUCTION FACILITY GOES.
We’ll make sure it performs.
Global Flow provides Integrated Energy Solutions to run oil and
natural gas production operations with integrity and effciency
– from automation/SCADA solutions, including vendor-neutral SCADA
systems, to electrical and instrumentation controls plus process
equipment and fabrication. At Global Flow, customer support
means access to expertise for your project from day one through
completion.
If working with multiple vendors is costing time and money, let
Global Flow’s Integrated Energy Solutions be your single source solution.
000PSN-GlobalFlow-FP.indd 1 11/8/12 9:19:57 AM PSAC_Winter_2012_p10-15.indd 10 11/16/12 4:41:26 PM
WWW.PSAC.CA 11
globalfowinc.com
YOU DECIDE WHERE YOUR NEXT
PRODUCTION FACILITY GOES.
We’ll make sure it performs.
Global Flow provides Integrated Energy Solutions to run oil and
natural gas production operations with integrity and effciency
– from automation/SCADA solutions, including vendor-neutral SCADA
systems, to electrical and instrumentation controls plus process
equipment and fabrication. At Global Flow, customer support
means access to expertise for your project from day one through
completion.
If working with multiple vendors is costing time and money, let
Global Flow’s Integrated Energy Solutions be your single source solution.
000PSN-GlobalFlow-FP.indd 1 11/8/12 9:19:57 AM
BY LISA RICCIOTTI
KUDU INDUSTRIES RELIES ON AN INNOVATIVE CULTURE
AND PRODUCT LINE TO KEEP GROWING ITS BUSINESS
LEX DAMNJANOVIC IS ON THE HIGHWAY
somewhere between Provost and Calgary. The
chief operating officer of KUDU Industries
Inc. is riding with several KUDU employees
on the drive home after the company’s annual
budget-cum-brainstorming meeting.
It’s a dark, early winter evening, but Damnjanovic is
excited about the ideas that were exchanged during that
annual meeting, which included about 50 KUDU sales and
operations staff.
A
“This new pumpjack, our hydraulic stroker,
is KUDU’s first venture outside the artificial lift
area,” Damnjanovic says. “Our customers come
to us for help with everything and we don’t like
to say no. We have to innovate to stay ahead
and this new stroker addresses a lot of their
problems.”
KUDU’s philosophy of constant innovation
began with Robert Mills. He helped develop
the first commercial progressing cavity pump
(PCP) for oil wells in 1979. Mills formed KUDU
along with his son Ray, in the Calgary family’s
garage in 1989 to continue innovating PCPs and
improve production for Canada’s oil industry.
KUDU has continued to develop the artificial
lift system and to introduce new products.
Innovation in the oilfield industry has become
more important than ever. Oil supply from easy-
to-access reserves will soon be inadequate to meet
the global needs of an expanding population.
Soheil Asgarpour, president of the Petroleum
Blueprint
Commercializing
FOR
A
Technology
PSAC_Winter_2012_p10-15.indd 11 11/19/12 5:15:02 PM
Audit t Tax t Advisory
Our client Swift Oilfeld Supply Inc. has been growing
steadily, and their success is not by chance. Operating
in an industry known for its boom and bust cycles, they
wisely recognized that rapid expansion could get them
ahead in the short term but wasn’t necessarily the best
answer for the long term. Swift Oilfeld Supply shares
our thinking regarding growth, always applying both
reason and instinct to make important decisions.
At Grant Thornton LLP, we take great pride in our
clients’ successes—and this is no exception.
If you’re involved in the oil and gas industry, give us
a call. And let us help unlock your potential for growth.
Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd
Instinct says:
there’s more
than one way.
Reason says:
we need to grow.
000PSN-GrantThorton-FP.indd 1 11/2/12 4:31:25 PM PSAC_Winter_2012_p10-15.indd 12 11/16/12 4:41:40 PM
WWW.PSAC.CA 13
Technology Alliance of Canada, says the world
will need to add the equivalent of six new Saudi
Arabia-sized oilfields by 2030. “We’re beginning
to run out of the low-hanging fruit,” he says.
“Alternative energies are being developed, but
there’s nowhere near enough available at afford-
able prices to meet the growing need. There’s no
other solution but innovation—new technology
is key to accessing more challenging oil reservoirs
such as tight oil.”
Investing in innovation has brought the world
to KUDU’s door, and vice versa. The company has
expanded its business into 32 countries, which span
the alphabet, from Albania, Argentina and Austra-
lia to the U.S., Venezuela and Yemen. Russia is its
newest business territory. KUDU holds 20 patents
related to PCPs, with another five pending.
KUDU’s newest technology to move from test
phase to market is the hydraulic stroking unit
Damnjanovic is so excited about. The unit is
twice the size of a standard hydraulic stroker and,
KUDU’s COO says, it does twice the work.
The new unit will be released in early 2013,
but work on the stroker began half a year earlier
because of a suggestion from one of KUDU’s
clients. “It started very locally with us asking
KUDU’s branch managers if they’d ever thought
about building a larger pumpjack,” says Chris
Holben, production superintendent with West-
Fire Energy Ltd. “Then things progressed quickly.
Six months after we got the phone call inviting us
to work together on the project, we were install-
ing the new pumpjack.”
WestFire is currently using 10 of the new
hydraulic strokers in west-central Saskatchewan.
The company tested the units for KUDU at its oil
properties in the Viking formation. KUDU chose
WestFire to run the pilot project because the two
companies have a long-standing relationship – and
because it was WestFire’s idea.
The larger-pump concept was already on
KUDU’s radar, but consistently hearing the
need from customers helped move the idea into
research and development (R&D). “We’re not
a one-hit wonder,” says Damnjanovic. “We’re
always looking for how we can reduce operating
costs for our customers and optimize produc-
tion.”
KUDU’s R&D spending is driven by customer
demand. The amount can vary from year to year,
but Damnjanovic estimates R&D accounts for one
to two per cent of the company’s annual costs. All
staff members are responsible for pushing inno-
vation forward. Feedback from customers and
sales reps is documented in KUDU’s ISO system.
From there, ideas become seeds in an efficient
growth process that sees those ideas bear fruit, lie
fallow until the time is right for germination, or
hit the compost bin as non-viable.
“We look for the big ideas. Solutions that will
solve problems for the masses, not one company,”
Damnjanovic explains. “And our goal is to make
things incrementally better. We want game-
changers, new concepts with the potential to
revolutionize the industry.”
That approach has paid off in the past with the
development of highly successful new products
like the PCP Well Manager, the Top Tag system
and Tough Coat. Well Man-
ager was developed five years
ago when, Damnjanovic says,
“we realized everything we were putting out was
dumb steel.” Smart technology was added to the
Well Manager that measures flow rates and lets
flow speed increase to optimal levels, then adjusts
as needed.
Top Tag is the first engineered PCP that allows
the user to locate the rotor inside the stator without
using a tag bar. This KUDU product was developed
at the suggestion of a steel mining crew drilling in
the Lloydminster area. They consistently encoun-
tered plugged pumps and restricted flow, similar
to water trying to flow through a pinched garden
hose. By removing the tag bar, Top Tag improves
flow and extends the pump life.
Damnjanovic says the R&D for those two
innovations was fairly straightforward. Develop-
ing Tough Coat, a metal coating applied to PCP
“ WE HAVE TO INNOVATE TO STAY AHEAD.”
- ALEX DAMNJANOVIC, COO OF KUDU
Audit t Tax t Advisory
Our client Swift Oilfeld Supply Inc. has been growing
steadily, and their success is not by chance. Operating
in an industry known for its boom and bust cycles, they
wisely recognized that rapid expansion could get them
ahead in the short term but wasn’t necessarily the best
answer for the long term. Swift Oilfeld Supply shares
our thinking regarding growth, always applying both
reason and instinct to make important decisions.
At Grant Thornton LLP, we take great pride in our
clients’ successes—and this is no exception.
If you’re involved in the oil and gas industry, give us
a call. And let us help unlock your potential for growth.
Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd
Instinct says:
there’s more
than one way.
Reason says:
we need to grow.
000PSN-GrantThorton-FP.indd 1 11/2/12 4:31:25 PM PSAC_Winter_2012_p10-15.indd 13 11/19/12 5:08:06 PM
14 WINTER 2012 PETROLEUM SERVICES NEWS
Leaders in Safety and Training
for the Oil and Gas Industry
Enform is the safety association for Canada’s upstream
oil and gas industry. Established by industry for industry,
Enform helps companies achieve their safety goals by
promoting shared safety practices and by providing:
» Effective training, including courses on general
and operational safety programs and petroleum
fundamentals
» Expert audit services
» Professional advice
Our vision is no work-related incidents or injuries
in the Canadian upstream oil and gas industry.
Contact Enform today for more information.
Email info@enform.ca Calgary 403.516.8000 Toll-free 1.800.667. 5557 www.enform.ca
000PSN.Enform_1-2H.indd 1 1/30/12 11:58:26 AM
rotors to reduce corrosion and eliminate the need
for chrome, was a whole different scenario. “It
uses a very sophisticated process that took a lot of
smart people years to figure out, with a lot of late
hours and sleepless nights,” he recalls.
Typically, KUDU’s product development pro-
cess has a one-year cycle. The company focuses
on fast delivery to stay in sync with the market
and won’t develop a product unless there’s strong
demand and the timing is right. All ideas are
vetted through an initial “bounce-back” assess-
ment, run by customers and KUDU’s sales people
to see if a good idea has the potential to be one of
the great ideas the company likes to pursue.
If the idea bounces, it then moves to a three- to
four-month market research phase. At this point
KUDU determines the retail cost for the prospective
product. Instead of determining what it would cost
to make a new product, KUDU works backwards
from one question: what would their customers be
willing to pay? “Then our challenge is, can we make
it for that price?” Damnjanovic says. “It’s a red-light,
green-light gated process. A project either moves
ahead to actual development or not.”
R&D and engineering staff then spend about four
months developing prototypes of green-light ideas.
The next step—a very crucial one to KUDU—is
real-life testing of the new product in the field by
an interested KUDU customer. The feedback from
hands-on experience is essential for working out
any kinks and quirks of a new product.
“Being first or early to enter the market is
important, but sustainability is most important.
We have to be able to deliver what we promised,”
Damnjanovic says.
Generating ideas seems to be the easy part of
KUDU’s creative yet demanding R&D process. Fol-
lowing brainstorming at last year’s annual meeting,
about 50 ideas received serious consideration. Only
seven made it through the gate into development.
This year, following the company’s annual
budget meeting in Provost, KUDU employees
are excited for what’s ahead in 2013. There’s high
hopes for the new hydraulic pump, lots of plans
to take existing products into new international
markets and, of course, KUDU has some new
ideas waiting to blossom.
Damnjanovic can’t reveal details, but does
disclose that KUDU is finessing innovations for
insertable PCPs, as well as thermal application
products such as the high-temperature PCPs in
demand for SAGD operations.
“They’re a very grounded bunch of guys,” West-
Fire’s Holben says, about KUDU. “They don’t let
success go to their heads and they haven’t strayed
from their business plan and their roots. They gave
us an innovative product we can use.”
PSAC_Winter_2012_p10-15.indd 14 11/19/12 5:08:49 PM
WWW.PSAC.CA 15

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you’re
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PSAC_Winter_2012_p10-15.indd 15 11/16/12 4:42:00 PM
Mosl Versolile Pipeline
www.fIexpipesystems.com
www.showcor.com
Keep your eye on the prize. The versotile product lines of
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ond tested products with proven reliobility on your site, you
need Flexpipe 5ystems on your teom.
Froudly modernizing pipelines. Agoin.
lt Foys to be FIexibIe.
Number óó: Flexpipe 5yslems
Applicotion Engineers use industry
leoding ossessment tools to ensure
correct product selection.
Number 12: FlexCord
Linepipe
IM
is ovoiloble for
opplicotions with pressures up to
2000 psi.
FlexFocls
000PSN-Flexpipe-FP.indd 1 11/6/12 10:16:40 AM PSAC_Winter_2012_p16-19.indd 16 11/16/12 4:43:31 PM
WWW.PSAC.CA 17
HE PETROLEUM Services
Association of Canada (PSAC)
kicked off its 2012 Industry
Insights Forum with its annual
general meeting to recognize an outstanding
year for the association.
Distinguished Service Awards were
presented to volunteers from PSAC member
companies whose dedication and commitment
enabled PSAC to deliver outstanding events,
resources and programs, including the
Education Fund Golf Tournament and the 2012
Spring Conference.
PSAC also saluted members celebrating
their longstanding service, including several
reaching the 30-year milestone. PSAC also
honoured retiring directors Brian Coston,
Mike Davis, Ian Simister, Ken Willson and
Gord McCormack. The AGM welcomed PSAC’s
2012-2013 Board Chair, Lucas Mezzano, and
the new Board of Directors. Members also
reviewed financial statements and looked back
at a fruitful year for PSAC.
Mark Salkeld, PSAC president and CEO,
outlined his highlights of 2012 which
included the strengthening of relationships
with senior federal and provincial officials,
the announcement of a new Lease Lighting
Guideline, and the continuation of PSAC’s
successful public outreach and media relations
programs.
Salkeld capped the meeting off with the
introduction of a new look and feel for PSAC,
including a new logo and website, with the
tagline “Working Energy.” He explained that
the tagline reflects the dedication, innovation
and leadership of PSAC’s member companies.
PSAC’S 2012 INDUSTRY INSIGHTS FORUM HIGHLIGHTS THE
GLOBAL IMPACTS ON CANADA’S ENERGY INDUSTRY
T
2013 CANADIAN DRILLING ACTIVITY FORECAST AND INDUSTRY OUTLOOK
A standing-room only crowd attended the 2013 Canadian Drilling
Activity Forecast and Industry Outlook session. David Yager, former
PSAC Chair, moderated the session. Roger Serin, an analyst with TD
Securities, delivered an engaging presentation on investor trends over
the last 40 years and the current demand for producers to provide yields
to investors.
Allen Brooks and Michael de Carle, with investment bank PPHB,
provided the Oilfield Services Outlook. Their presentations touched
on the possible impact on Canada’s energy industry from the U.S.
presidential election, which took place the same day. David Pryce, vice-
president of operations with the Canadian Association of Petroleum
Producers, followed this presentation with an overview of the future of
Canada’s energy industry.
PSAC president Mark Salkeld gave the final presentation with his
outline of the 2013 Canadian Drilling Activity Forecast, which estimates
a steady year ahead for Canada’s oilpatch with an expected 11,400 wells
drilled.
INDUSTRY INSIGHTS DINNER
PSAC hosted a sold out crowd, including Honourary PSAC Member Roger
Soucy, at its annual Industry Insights Dinner. Lucas Mezzano assumed his
position as Board Chair of PSAC and gave a preview of the year that lies
ahead for the association and the petroleum services industry.
Mosl Versolile Pipeline
www.fIexpipesystems.com
www.showcor.com
Keep your eye on the prize. The versotile product lines of
FlexFipe, FlexCord ond FlexFipe HT will moke you the chompion
of linepipe dependobility. When you wont oword winning, tried
ond tested products with proven reliobility on your site, you
need Flexpipe 5ystems on your teom.
Froudly modernizing pipelines. Agoin.
lt Foys to be FIexibIe.
Number óó: Flexpipe 5yslems
Applicotion Engineers use industry
leoding ossessment tools to ensure
correct product selection.
Number 12: FlexCord
Linepipe
IM
is ovoiloble for
opplicotions with pressures up to
2000 psi.
FlexFocls
000PSN-Flexpipe-FP.indd 1 11/6/12 10:16:40 AM
Global
Give
AND
Take
PSAC_Winter_2012_p16-19.indd 17 11/19/12 5:09:34 PM
18 WINTER 2012 PETROLEUM SERVICES NEWS
“PSAC will continue to provide the advocacy and tools its members
need so that the innovation shaping the operational, safety, and
environmental performance of our industry continues to be standard
setting the world over,” he said. “A large part of this work will continue to
focus on strengthening relationships with government, our peers and the
broader public.”
Dr. Jack Mintz, Palmer Chair in Public Policy at the University of
Calgary, was the dinner’s keynote speaker and delivered an engaging
look at the fiscal situation for Canada, the U.S. and Europe. In particular,
he discussed the potential impact the outcome of the U.S. presidential
election could have on the American economy, and in turn, how the
election outcome is likely to impact Canada’s oil and gas industry.
To read more about PSAC’s year in review, please access the 2012
Annual Report at www.psac.ca.
MNP IS PkOUO 1O
IN1kOOUCL OAVIO YAGLk,
1HL NLW NA1IONAL
LLAOLk OF OUk OILFILLO
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Contact Oav|d Yager, Nat|ona| Leader,
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or dav|d.yager@mnp.ca.
DISTINGUISHED SERVICE
AWARD RECIPIENTS
Al Aimers
Brett Noble
Brian Farmer
Brian Paisley
Clyde Bonnell
Coleen Hutton
Darcy Kuhn
Doug Smith
Gail Purdy
Garry Lane
Glenn Walker
Gord Haycraft
Graham Maglio
Ken Braun
Lee Emond
Mandy Dewart
Marty Price
Renee Vanderwolf
Richard Dunn
Tamara Nelson
Travis Strube
PSAC 2011-2012 LONGSTANDING MEMBERS
30 YEAR MEMBERS
EVRAZ Inc. NA
Master Flo Valve Inc.
Precision Rentals, a Division of Precision
Limited Partnership
Stream-Flo Industries Ltd.
25 YEAR MEMBERS
Mullen Oilfield Services LP
15 YEAR MEMBERS
Andy’s Oilfield Hauling Ltd.
Aveda Transportation and Energy Services Inc.
Calfrac Well Services Ltd.
Magnum Perforating Services Inc.
Mudco Services Ltd.
Q’Max Solutions Inc.
Weir SPM
10 YEAR MEMBERS
IROC Energy Services Corp.
Nabors Blue Sky Ltd.
Steel View Oil Pressure Services Ltd.
5 YEAR MEMBERS
911 Industrial Response Inc.
Action Industrial First Aid Limited
Apex Oilfield Services (2000) Inc.
Bravo Oilfield Safety Services Inc.
Canadian Energy Services L.P.
Clear Environmental Solutions
Division of Canadian Energy Services L.P.
Highmark Wireline Ltd.
Momentive Specialty Chemicals Canada Inc.
Panda Tank & Vac Truck Services Inc.
ProTechnics, a Division of Core Laboratories
Canada Ltd.
Quattro Energy Services Inc.
Terra Water Systems, a Division of Precision
Limited Partnership
United Centrifuge Ltd.
Wenzel Downhole Tools Ltd.
PSAC THANKS OUR SPONSORS
FOR THEIR GENEROUS SUPPORT
2013 Canadian Drilling Activity Forecast
& Industry Outlook Sponsor
Industry Insights Dinner Sponsor
Industry Sponsor
Networking Social Sponsor
PSAC_Winter_2012_p16-19.indd 18 11/16/12 4:43:40 PM
WWW.PSAC.CA 19
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PSAC_Winter_2012_p16-19.indd 19 11/21/12 3:35:22 PM
20 WINTER 2012
Services
PETROLEUM SERVICES NEWS
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PSAC_Winter_2012_p20-21.indd 20 11/21/12 3:38:48 PM
WWW.PSAC.CA 21
DDIE DAVIS SPENT THE
second half of his Canadian
Football League (CFL) career
playing for the Saskatchewan
Roughriders, but when he retired after the 2009
season there was no question he was going to
live in Calgary. The defensive back won his first
Grey Cup with the Calgary Stampeders in 1998
and made Alberta his permanent home in 1999.
“This is where my wife is from, this is where my
kids were born, this is where I’m going to end
up,” he says.
In total, Davis played 15 seasons in the CFL,
was named a CFL All-Star four times and won a
second Grey Cup with the Roughriders in 2007.
The 39-year-old from St. Louis turned down a
few coaching opportunities so he could spend
more time at home with his family. Two years
ago, Davis started working for Halliburton
as a production enhancement account
representative.
PETROLEUM SERVICES NEWS: WHEN DID YOU REALIZE THAT
CANADA WOULD BE YOUR HOME?
EDDIE DAVIS: After my first year when I came to
play for Calgary. I loved the city so much and,
at the time, the Canadian dollar was 65 cents
compared to the U.S. dollar, so it didn’t make
sense for me to cross the border and go back
home. I knew a lot of guys that did it; they’d end
up losing money and would have to work hard
down in the States to get it back.
PSN: WHAT MADE YOU DECIDE TO WORK IN THE OIL AND
GAS SERVICES SECTOR?
ED: It just so happened that my neighbour
worked for Halliburton. When I retired from
playing football, I wasn’t looking for a job, I
was just happy hanging out with my family and
travelling, but he mentioned that they needed
some sales people at Halliburton.
E
Foo1n:ii
Fvom
They brought me into the BDFA (business
development field associate) program. They
had been running it in the U.S. for years, but
nobody from Canada had ever been through
the program. I’m pleased to say I was the first
and last person to do the program in Canada.
The goal of the program is to basically renew
your sales tools. It exposes the person to several
different entities in the services industry: the
cementing side, the completions side and the
hydraulic fracturing side.
PSN: WHAT SKILLS FROM YOUR FOOTBALL CAREER HAVE
YOU BEEN ABLE TO APPLY TO YOUR DAY-TO-DAY JOB?
ED: The biggest thing is just to listen. When you’re
out there on the field, and you have 60,000 people
cheering, it’s hard to hear other players calling out
plays or making checks. You have to train yourself
to listen to a specific person’s voice.
I do the same thing when I’m talking to clients,
I’ll sit back and just let the client talk. I think a lot
of the time in sales, the sales person can talk too
much and they miss what the client actually needs.
PSN: WHAT SAYING OR PHRASE INSPIRES YOU?
ED: Never give up. I’m a strong believer that if you
work hard and see the goal in front of you, you
can attain it, no matter how long it may take you.
PSN: IF YOU DIDN’T PLAY FOOTBALL, OR HAVE YOUR
CURRENT CAREER, WHAT CAREER WOULD YOU BE IN?
ED: I was in mechanical engineering, so I probably
would have ended up working for a company in
the auto industry. I went to school in northern
Illinois, and Detroit is in that area, so that’s
probably what I’d be doing right now.
1o
Fv:cxi×c
Eddie Davis won a Grey Cup with the Calgary
Stampeders in 1998 and with the Saskatchewan
Roughriders in 2007.
PSAC_Winter_2012_p20-21.indd 21 11/19/12 5:10:47 PM
22 WINTER 2012
Services
PETROLEUM SERVICES NEWS
MYTH #1
THE OIL AND GAS INDUSTRY IS NOT ELIGIBLE FOR SR&ED
Part of the SR&ED definition notes that prospecting, exploring or drilling
for oil and natural gas is not eligible for the tax program. “In the services
sector, a lot of companies think that because they’re part of the oil and gas
sector they are excluded,” Reain says. “The exclusion is saying that if this is
all you’re doing, it’s excluded.”
However, Reain says, if a company is developing a tool, a device, an
apparatus or a product to perform any of those activities, then SR&ED is
applicable. “It’s a subtle difference, but it’s a big difference,” he says.
MYTH #2
THE CANADA REVENUE AGENCY (CRA) IS TOUGH ON THE OIL AND GAS INDUSTRY
“This is somewhat true, but what the CRA is focusing on making
sure you have the documentation that says you are doing this type of
work,” Reain says. “It’s incumbent on the tax payer to keep the proper
evidence.”
Reain says CRA focuses on when a SR&ED project starts and ends,
so companies should create a checklist for SR&ED projects and try
to identify them early. “It can be meeting minutes from monthly
management meetings, where you say we have this issue and here’s
what we’re doing about it,” he says. “It could be an AFE (authorization
for expenditure) to say we’re going to set up this project to figure this
problem out; or it could be tool development, so it could be a project
plan to develop a tool for a client.”
MYTH #3
IT’S NOT WORTHWHILE TO CLAIM SR&ED ANYMORE
The federal government outlined plans to scale back SR&ED funding in
the 2012 budget. The government plans to redirect R&D funding from
this program to more direct R&D funding support programs, such as
the Industrial Research Assistance Program (IRAP). Also, beginning
on January 1, 2013, the general SR&ED tax credit will be reduced from
20 per cent to 15 per cent; and capital expenditures will not be part of
SR&ED beginning in 2014.
“It’s still 15 per cent, plus 10 per cent in Alberta, so it’s still a 25 per
cent tax credit in Alberta, which from my perspective is quite lucrative,”
Reain says. “For small and medium-sized enterprises, which there are
lots of in the services sector, the rate hasn’t changed at all [it will remain
at 35 per cent].”
ESEARCH AND DEVELOPMENT
(R&D) often conjures up images of
white lab coats. Shawn Reain, tax
partner and western Canadian
SR&ED leader with PricewaterhouseCoopers
LLP, says that misconception, as well as a few
others, could be costing oil and gas services sector
companies money.
The Scientific Research and Experimental
Development (SR&ED) tax program is the
federal government’s biggest source of R&D
funding. It provided $3.6 billion in tax
assistance across Canada during 2011. Reain
says nearly 90 per cent of the claims filed under
SR&ED are for experimental development,
which is work done to advance technology
and either create new, or improve, existing
materials, devices, products or processes.
“If companies are going to do that
themselves, they’re going to go bankrupt,”
Reain says. “They’re going to be like Kodak.”
Reain says there are plenty of petroleum
services companies that are developing new
technologies and processes, but not taking
advantage of SR&ED. The tax program
provides eligible companies with an income
tax deduction and an investment tax credit.
Here, Reain dispels some of the myths
surrounding the tax program and explains how
services sector companies can tap into it. “It is
a pretty lucrative return on your investment,”
he says. “You have to be proactive about it and
make it a low impact activity on personnel time
by making it an efficient process.”
MYTH #1
SR&ED Mythology 101
R
DON’T BELIEVE EVERYTHING YOU’VE
HEARD ABOUT FEDERAL RESEARCH AND
DEVELOPMENT TAX PROGRAMS
BY STEVE MACLEOD
BUSINESS MATTERS
MYTH #2
MYTH #3
“YOU HAVE TO BE PROACTIVE ABOUT IT AND MAKE
IT A LOW IMPACT ACTIVITY ON PERSONNEL TIME
BY MAKING IT AN EFFICIENT PROCESS.”
PSAC_Winter_2012_p22-28.indd 22 11/16/12 4:52:01 PM
WWW.PSAC.CA 23
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PSAC_Winter_2012_p22-28.indd 23 11/16/12 4:52:05 PM
24 WINTER 2012
Services
PETROLEUM SERVICES NEWS
PSAC IN ACTION
THE PETROLEUM SERVICES ASSOCIATION OF CANADA
(PSAC) CONTINUES TO KEEP THE SERVICES SECTOR FRONT
AND CENTRE THROUGH ADVOCACY AND OUTREACH
MAKING CONNECTIONS IN THE MARITIMES
PSAC met with Bruce Northrup, New Brunswick’s minister of Natural
Resources, as well as the deputy minister and representatives from the
Ministry of Energy to introduce PSAC and discuss issues related to
hydraulic fracturing and the oil and gas development in the province.
Specifically, PSAC discussed IRP 24, the Industry Recommended Practice
regarding fracture stimulation that is currently under development. Also in
New Brunswick, PSAC delivered a presentation explaining the IRP process
at the 37th annual Exploration, Mining and Petroleum Conference held in
early November.
PSAC REACHES OUT TO MANITOBA
PSAC met with Keith Lowdon, director, Petroleum Branch, Manitoba
Innovation, Energy and Mines, to discuss concerns regarding municipal
infrastructure, road use agreements and hydraulic fracturing. PSAC
provided information regarding the Road Use Agreements developed in
Alberta and has committed to participating in future discussion on these
issues.
PSAC MEETS WITH B.C. MINISTER OF ENERGY AND MINES
This fall, PSAC met with Rich Coleman, B.C. minister of Energy and Mines,
to introduce PSAC and to open dialogue about the petroleum services
sector in the province. The meeting touched on the sector’s size and scope,
and issues facing the industry in northeastern British Columbia.
PSAC WORKS WITH B.C. GOVERNMENT ON NATURAL GAS WORKFORCE PLANNING
PSAC is contributing to a comprehensive workforce strategy and action
plan for the B.C. natural gas industry. The goal is to ensure there will be
sufficient numbers of skilled workers to meet the anticipated expansion
of the sector. All potential sources of and mechanisms for labour market
supply, including apprenticeship training, institutional skills training,
recruitment and retention strategies, inter-sector and inter-provincial
migration, and international immigration are being reviewed along with
the full participation of First Nations.
PSAC ATTENDS THE 2012 ENERGY AND MINES MINISTERS’ CONFERENCE
Over three days this September, PSAC represented its members at the 2012
Energy and Mines Ministers Conference in Charlottetown, PEI. PSAC had
the opportunity to speak with Joe Oliver, minister of Natural Resources, as
well as provincial ministers, deputy ministers and senior staff on a number
of issues affecting the petroleum services sector including hydraulic
fracturing, labour, competitiveness, and access to markets.
PSAC REPRESENTS MEMBERS AT PACIFIC NORTH WEST ECONOMIC REGION
(PNWER) CONFERENCE
PSAC attended the PNWER conference which is intended to coordinate
provincial and state policies to achieve continued economic growth while
maintaining the region’s natural resources. Conference delegates included
elected and government representatives from Western Canada and
Washington, Oregon and Montana. PSAC attended sessions discussing
energy, workforce development, and the New West Partnership (NWP).
Topics at the NWP session included a proposal to review the harmonization
of regulations such as “oilwell servicing provisions.”
PSAC TESTIFIES AT THE HOUSE OF COMMONS ON LABOUR ISSUES
PSAC appeared as a witness before the Canadian House of Commons
Standing Committee on Human Resources, Skills and Social Development
and the Status of Persons with Disabilities this fall. PSAC provided comments
in regard to two of the committee’s studies: Fixing the Skills Gap: Addressing
Existing Labour Shortages in High Demand Occupations and Understanding
Labour Shortages: Addressing Barriers to Filling Low-Skilled Jobs.
Following its submission to pre-budget consultations, PSAC was invited
to appear before the House of Commons Standing Committee on Finance
regarding the upcoming federal budget. PSAC tabled recommendations
related to tax credit programs for overseas workers. PSAC also asked the
government to provide clarification regarding taxable benefits as they
relate to travel and accommodation costs incurred by out of province
employees, and tax credits for employee training.
PSAC PARTICIPATES IN MANUFACTURING DAYS ON THE HILL
PSAC participated in a series of executive roundtable discussions on the
future of manufacturing in Canada as part of its involvement with the
Canadian Manufacturing Coalition (CMC). In total, representatives of the
CMC met with 55 Members of Parliament, including eight ministers and
senior policy advisors from seven ministries.
PSAC SUPPORTS YOUTH EMPLOYMENT STRATEGY
This fall, PSAC hosted a news conference with Minister of State Ted Menzies
who put a call out for proposals from companies who may be eligible for
funding under the Youth Employment Strategy (YES). The program is
dedicated to projects that connect young Canadians with private sector
jobs. The federal government has dedicated $50 million to the program
with the goal of connecting more than 3,000 Canadian youth with jobs in
high demand, such as skilled trades.
PSAC PARTICIPATES IN AN ONLINE JOB FAIR TARGETING PETROLEUM SERVICES
PSAC and a select number of PSAC members recently participated in an
online job fair organized by the Petroleum Human Resources Council of
Canada (PHRCC) in partnership with the Government of Alberta. The
job fair was visited by more than 2,000 people and resulted in thousands of
applications for jobs in high demand.
PSAC PARTICIPATES IN FEDERAL ROUNDTABLES ON LABOUR ISSUES
PSAC recently participated in two federal roundtables to address labour
challenges facing the petroleum services sector. Specifically, PSAC provided
input at the skill shortages and training needs roundtable hosted by Diane
Finley, minister of Human Resources Skills and Development Canada.
PSAC also participated in a roundtable, hosted by Neil Yeates, deputy
minister of the Department of Citizenship and Immigration Canada
(CIC). The purpose of the CIC roundtable was to discuss the creation of
a modernized employment application management system to support the
introduction of a fast and flexible economic immigration system to meet
Canadian labour market needs.
PSAC PARTICIPATES IN MANUFACTURING DAYS ON THE HILL
PSAC SUPPORTS YOUTH EMPLOYMENT STRATEGY
PSAC PARTICIPATES IN AN ONLINE JOB FAIR TARGETING PETROLEUM SERVICES
MAKING CONNECTIONS IN THE MARITIMES
PSAC REACHES OUT TO MANITOBA
PSAC MEETS WITH B.C. MINISTER OF ENERGY AND MINES
PSAC WORKS WITH B.C. GOVERNMENT ON NATURAL GAS WORKFORCE PLANNING
PSAC ATTENDS THE 2012 ENERGY AND MINES MINISTERS’ CONFERENCE
PSAC REPRESENTS MEMBERS AT PACIFIC NORTH WEST ECONOMIC REGION
(PNWER) CONFERENCE
PSAC PARTICIPATES IN FEDERAL ROUNDTABLES ON LABOUR ISSUES
PSAC_Winter_2012_p22-28.indd 24 11/19/12 5:11:31 PM
WWW.PSAC.CA 25
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ALLTHE DIFFERENCE
THIS IS THE FOUNDATION
www.fp-imarketing.com/psac
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1 (877)-872-2ROI
T DIDN’T TAKE LONG FOR Ferus Inc. to realize the benefits of
running trucks powered by liquefied natural gas (LNG) engines.
The Calgary-based company is now developing an LNG
facility in Alberta to serve its fleet of about 100 LNG trucks
and provide service to other companies interested in converting their
trucks to LNG engines.
“Ferus has had this focus (on LNG as a fuel source alternative for
diesel) for a couple of years now,” says Travis Balaski, manager of
market development for LNG in Canada with Ferus.
Ferus has focused on liquefied gases in Alberta for about a decade.
The company launched in 2002 to provide liquid carbon dioxide (CO2)
and liquid nitrogen (N2) for well stimulation. Ferus now has eight
cryogenic plants to produce CO2 and N2 throughout Canada and
the U.S., as well as a fleet of 300 trucks to transport the product. This
specialized service has given the private company a niche that includes
storage facilities and onsite services.
Ferus started looking at LNG engines a couple of years ago and test
drove a truck at the facility of a natural gas engine maker in Vancouver.
After testing one unit out in the field, Ferus introduced an LNG-
powered heavy-duty truck into its fleet back in March. The company
says it was the first LNG truck to be deployed in Alberta.
The LNG trucks are equipped with 475-horsepower engines and have a
range in excess of 700 kilometres. “When comparing it to diesel, you could
have a reduction in the 20- to 30-per-cent range on the CO2 emissions,
over 70 per cent reduction on your NOx (nitrogen oxide) emissions, over
90 per cent reduction on your particulates and 99 per cent reduction on
your SOx (sulphur oxide) emissions,” Balaski says.
Fuelled by Natural Gas
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Some drilling fleets are also converting their rigs to be powered
by natural gas instead of diesel. Balaski says there’s also an economic
benefit to using LNG because it can be supplied at a 20 to 40 per cent
discount compared to diesel, on a gallon equivalent basis, which includes
transportation, storage and engine gasification.
“We’ve been quite aggressive in this market. We brought equipment
onto the ground before we had our own production,” Balaski says. “That
way, we could supply and service pilot projects with potential customers
once we have a facility of our own.”
Ferus plans to have its first LNG facility constructed by early 2014.
The company is already working on pilot projects with other companies
and Balaski says Ferus plans to become a full-service provider of LNG
to others.
“We have begun feeding the market so when we do have production,
we’ve educated and made people feel comfortable with LNG as a fuel
source, so they can sign on to longer-term deals,” he says.
FERUS INC. IS PLANNING AN LNG FACILITY TO SUPPORT
ITS FLEET OF NATURAL GAS-POWERED TRUCKS
BY KAREN PETKAU
Ferus plans to have its first LNG facility constructed by early 2014.
PSAC_Winter_2012_p22-28.indd 25 11/19/12 5:12:25 PM
26 WINTER 2012
Services
PETROLEUM SERVICES NEWS
NOV Mission offers equipment and services for all of your well service
needs. Along with an extensive product offering of proven brands,
Mission has a sales and after-market network that spans 6 continents
equipped for in-house and on-site operations. All Mission well service
equipment can be serviced, repaired, and recertifed everywhere you are.
For more information visit: www.nov.com/mission
O n e C o m p a n y . . . U n l i m i t e d S o l u t i o n s
Email: mission@nov.com
©
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000PSN-NOV-FP.indd 1 11/2/12 4:43:11 PM
A LOOK AT LEADERSHIP
SCOTT HAUCK
President, Distribution Services Canada
National Oilwell Varco
Years in Services Sector: 30
BRAD FEDORA
President and CEO
Canyon Technical Services Ltd.
Years in Services Sector: 4
PETROLEUM SERVICES NEWS TALKS
WITH PSAC’S BOARD OF DIRECTORS
AND TAKES A PERSONAL LOOK AT
LEADERS IN THE SERVICES SECTOR
IF YOU COULD DO ANY OTHER JOB/OCCUPATION, WHAT WOULD THAT BE?
SH: I would be a hunting, fishing and outdoor outfitter. Being outdoors
and enjoying very pristine, remote activities around nature has always
been my leading passion.
BF: Casino manager or fishing guide.
WHAT IS YOUR FAVOURITE BOOK OF ALL TIME?
SH: Where the Red Fern Grows
BF: The Big Short. It’s about the making of the financial crisis.
WHAT DO YOU THINK IS THE BIGGEST CHALLENGE FACING CANADA’S ENERGY INDUSTRY
AT THIS TIME?
SH: The dynamics of our Canadian and global energy paradigm have
changed, and we are at risk of becoming a pawn in the game if we
do not develop other markets or add value to the products that we
produce. For the time being the nut has been cracked and energy, and
the global opportunity to find and develop energy, is more pervasive
than at any other time in my 30-year career. I believe we produce oil
and gas in Canada under some of the most environmentally sound
practices in the world and I imagine that we will continue to be on that
forefront which in itself adds value to our products and may be part of
the new horizon.
BF: Perception and trust. The oil and gas industry and the general public
are still at odds – we have a lot of trust to build.
WHAT MOTTO OR PHRASE DO YOU LIVE BY?
SH: NO YNRZ (No Whiners). This is my personalized license plate.
BF: You only live once – enjoy what you are doing.
IF YOU COULD TRAVEL TO ANYWHERE IN THE WORLD, WHERE WOULD YOU GO?
SH: I pretty much have and “there is no place like home.”
BF: Fly fishing in Cuba.
WHAT IS YOUR MOST TREASURED POSSESSION?
SH: Family.
BF: Family and friends.
WHAT FOOD DO YOU CRAVE? BETTER YET, WHAT IS YOUR SIGNATURE MEAL THAT YOU
MAKE?
SH: On the barbecue: spare ribs, potatoes and onions baked in tinfoil, corn
on the cob.
BF: My signature meal as of the summer of 2012 is a whole roasted and
smoked pig.
PSAC’s Board of Directors represents the diversity of Canada’s upstream
petroleum services, supply and manufacturing sectors. With more than 150
years of collective experience, PSAC’s board brings unparalleled breadth and
depth of expertise to the strategic direction of PSAC and the issues of the
day. Visit www.psac.ca to find out more about PSAC’s Board of Directors.
SCOTT HAUCK BRAD FEDORA
WHAT FOOD DO YOU CRAVE? BETTER YET, WHAT IS YOUR SIGNATURE MEAL THAT YOU
MAKE?
PSAC_Winter_2012_p22-28.indd 26 11/19/12 5:13:35 PM
NOV Mission offers equipment and services for all of your well service
needs. Along with an extensive product offering of proven brands,
Mission has a sales and after-market network that spans 6 continents
equipped for in-house and on-site operations. All Mission well service
equipment can be serviced, repaired, and recertifed everywhere you are.
For more information visit: www.nov.com/mission
O n e C o m p a n y . . . U n l i m i t e d S o l u t i o n s
Email: mission@nov.com
©
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000PSN-NOV-FP.indd 1 11/2/12 4:43:11 PM PSAC_Winter_2012_p22-28.indd 27 11/16/12 4:54:31 PM
000PSN-Rogers-FP.indd 1 11/8/12 9:06:13 AM PSAC_Winter_2012_p22-28.indd 28 11/16/12 4:52:36 PM

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