SWM V1i1 Brazil

Industrial Solutions
Phoenix Industrial, an ISO 9001:2008 certified company, provides integrated single source construction, fabrication and maintenance to the Western Canadian market. We strive to exceed the needs and expectations of our clients. From preliminary planning to completion of a project, Phoenix Industrial utilizes qualified professionals in all areas of development. Our people understand the challenges of working in industrial environments, whether it is in the shop, plant or field. We take pride in providing a safe and competent work force.
1-866-778-3130 www.phoenixindustrial.ca ISO 9001:2008
PROMOTION
SWANBERG INTERN ATION AL
On September 10, 2001, Dean Swanberg arrived in Bridgetown, Barbados to sign the papers needed to start up his Swanberg International.
The next morning, he watched, with the rest of the world, the horrors of the New York City trade centre terrorist attacks. I will never forget it, I just sat there thinking, What are you doing setting up an international company when planes are flying through buildings? reflects Swanberg of a sentiment that belied the good business decisions that he had just made. Swanberg says Swanberg International began as a pull in a direction in which his associates were uninterested.
Exploring the international opportunities was always something that interested me, more so than it did or does anyone else with whom I do business here domestically, says Swanberg. That is really what gets me going in the morning, thats where my business passion lies, in that international market. It just makes sense to me and gets me excited. A large component that made sense to Swanberg surrounded the fact that he could get an extra 10 or 15 years of productivity out of specialized equipment that continues to be state-of-the-art in certain global markets long after it has run its course in Western Canada. Canadian oil and gas service and technology is generally just way more advanced than that of the rest of the world. Our line is also
Brazil is very promising and of strong interest for us both because of the growing developments there in oil and gas, but also because it is a stable, great place in which to do business. Weve already met with Petrobras and were actively looking as we speak. ~ Dean Swanberg
PROMOTION
Dean Swanberg
very specialized, and here in Canada, guys are done with equipment long before its useful life is over; were spoiled here, we only run the best and the newest. So rather than sell it, I felt I would like to keep it in use to as great of an extent I could somewhere where it was still very relevant and sought after. Swanberg International grew aggressively as the parent company for four international divisions: Swanberg Bros. Bolivia Ltda., Swanberg Bros. Ecuador SA, Swanberg USA Inc., and Swanberg Arabia Company, a joint venture based in Saudi Arabia. In short order and in what Swanberg calls a small world when it comes to moving heavy equipment and dismantling some of the largest rigs in the world, the companys reputation soon became synonymous with excel-
lence and dependability. I find there are very strong connections in industry on an international level, much more so than people would realize, and our reach grew quickly in that arena just because people knew there was no project we couldnt handle and handle well. Swanberg says that good name grew quickly in large part because of the great reputations of the companys key principal managers who had years of collective international experience: Chuck Newcomb, Buck Kilgour, Russ Laing and Max Pattison. The 70 years of excellence in transportation services across Western Canada also added enormously to the success and growth of Swanberg International. Today, Swanberg International specializes in the transporting and relocation, dismantling and reassembling of rigs, and is currently working on projects in Louisiana,Texas, Mozambique, the Middle East, Bolivia and Ecuador and is actively exploring options in Brazil.
5851 San Felipe Suite 850 Houston, TX. 77057 Ph: 713-621-8111 Fx: 713-621-8333 www.swanberginternational.com
Poised for Success

The Centre for Research & Innovation has become the champion for innovation and new product development in the Peace Region. Through the CRI, area entrepreneurs and inventors are able to connect with scientists, researchers, mentors and investors to help move their ideas forward to commercialization. Although some CRI clients are already exploring international markets, the Centre continues to expand its network of contacts internationally for both markets and investment, readying the road for new, up and coming entrepreneurs. Recently CRI director Bruce Rutley PhD PAg, spearheaded a delegation , , from the Alberta Association of Colleges and Technical Institutes (AACTI) to Chile. The purpose of the trip was to explore rural innovation and technical commercialization opportunities. We now have a South American connection says Rutley. We have acquired many valuable contacts from Export Canada to six different Chilean universities looking for applied training and research. Its another door that is now open to the Peace Region. At a seminar hosted by the CRI in August, the idea of creating a local Angel Investment Network was launched. During the seminar, potential angels learned that if they were looking for an excellent return on their money in a relatively short timeframe, they could pool their dollars with other likeminded individuals and fund promising new start-up ventures right here in the Peace Region. Our goal was to have one new venture invested in by at least one Angel, and this we achieved, says Jim Letersky CRI Adjunct Staff member and , Angel workshop organizer. Over and above this, however, we have opened the eyes of some very influential businesspeople in this town. They liked what they learned and were very impressed with what they saw in our Peace Country entrepreneurs. Now theyll tell two friends and then theyll tell two friends and well be back here next year playing to a packed house. Although Angel Investing is a new concept in the Peace Region, the idea is fairly established throughout Canada and abroad. I was very impressed with the calibre of the entrepreneurs who presented, says Bill Payne, award winning American Angel Investor and facilitator of the CRIs seminar. I believe that some of these businesses are very scalable and may soon move beyond Angel Investment to appeal to Venture Capitalists outside of this area. The Peace Region has a proud innovative tradition to maintain. With only five per cent of the population, the Mighty Peace contributes 40 per cent of all patent inquiries in Alberta. Of note, Alberta holds more patents per capita than any other province in Canada. As a partnership between Grande Prairie Regional College and Peace River Economic Development Alliance, with significant funding from Rural Albertas Development Fund, the Centre for Research & Innovation has emerged as the regional champion for Innovation and applied research both of which are drivers for regional economic development.
Idea & invention management services Applied research services Implementation services Workshops
Table of Contents
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slick world Journal
World news that matters to Western Canadians in business ExclusivE onlinE contEnt at www.slickworldonlinE
24
Goliath wont bE stoppEd
Why Fort McMurrays economic bubble has not burst despite trouble in the oilpatch ExclusivE onlinE contEnt at www.slickworldonlinE
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into brazil
Stockwell Day, and a host of Canadians, eye up golden opportunities in South America ExclusivE onlinE contEnt at www.slickworldonlinE
From the Editor 8 Contributors 11 Executive Reading Lounge 18 Parting Thoughts 87 Cover
Photo illustration by Tevis Sample, with photos supplied by the Government of Canada
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The
unique
December issue of Canadas
Western Canadas Global Entrepreneur Magazine
WORLD
magazine
new
VOLUME 1 ISSUE 1 EdItOrIaL Jeff McCoshen

jeff@slickinternational.com
editorial director
editor in chief editorial research assistant contributors
Kathryn Engel
kathryn@slickinternational.com
is on its way
Cassidy Tissington
cassidy@slickinternational.com
Lionel Frey James Chester Erika Sherk Chelsea Cook
art director
art & dESIgn Tevis Sample
tevis@slickinternational.com
graphic design contributing photographers
Tamsyn Fuller
tamsyn@slickinternational.com
Jeff McCoshen Kathryn Engel Tevis Sample James Chester Chelsea Cook Randy Vanderveen
United Kingdom
Join Slick World international journalist James Chester and Slick Internationals lead developer Lionel Frey on their expedition to the United Kingdom where Canadians are seizing opportunities across the pond. Hear from Canadians across the UK doing business there, as well as those finding their niche in Western Canada in this special edition on location in the United Kingdom. And, come along to Saskatchewan, where its not only BIG stretches of flawless sky of note these days. Find out about work being done in conjunction with Alberta and B.C. to position to the west as the North American gateway of choice for the important Pacific and Asian economies, amid a collective goal of building on one of the most promising resource bases in the country. With an unflappable commitment to a 40 per cent cap on ads, space is limited in Canadas freshest new publication, so book your spot now.
Destination:
webmaster
OnLInE Jim Layher
jim@slickinternational.com
circulation
CIrCULatIOn / subscriptions Melody Sample MarkEtIng Ryan Avery

780.882.1910
melody@slickinternational.com
national sales director
british columbia accounts alberta south accounts saskatchewan accounts us general accounts texas accounts south american accounts
Patti Hanson
604.701.9298
Kelly McCoshen
403.880.7432
Lionel Frey
780.402.7121
David Frankel
203.775.3928 903.815.1959
Peggy Braun Luiz Fernando Souza

+55.31.9638.3072
director of operations
PrOdUCtIOn Lionel Frey
lionel@slickinternational.com
Subscription inquiries and back issues: slickworldonline.com | 1-877-754-2560

All content COPYRIGHT Slick International Sales Media & Development Inc. All rights reserved. Any use of contents of this publication without the express written permission of the publisher is strictly prohibited. All trademarks are the property of their respective owners. Views expressed by contributors may not be the representative views of the publisher.
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SFC
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brazil bEckons for canadian businEss
Canadas International Trade Minister urges businesses to look further south ExclusivE onlinE contEnt at www.slickworldonlinE
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why brazil, why now?
Find out why the country represents some of the most brilliant opportunities on the planet ExclusivE onlinE contEnt at www.slickworldonlinE
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pEtrobras
We take a look at the largest company in the Southern Hemisphere, and what it means to Canadians ExclusivE onlinE contEnt at www.slickworldonlinE
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canadians in brazil
Smart Canadians are positioning themselves in a lucrative hot spot ExclusivE onlinE contEnt at www.slickworldonlinE
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wEarinG thE flaG
Why the maple leaf may be a companys most valuable asset when looking beyond Canada to do business ExclusivE onlinE contEnt at www.slickworldonlinE
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thE Good, thE bad, thE uGly
Examining the state of the oil and gas industry in Western Canada ExclusivE onlinE contEnt at www.slickworldonlinE
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draGons dEn
This month features Arlene Dickinson, a woman with vision who sees the future in the right deal ExclusivE onlinE contEnt at www.slickworldonlinE/draGonsdEn
SLICKworldonline.com Visit the website for informative additional content

EDITOR BLOGS Our editors offer their assessments and opinions on the latest trends. EXPERT ADVICE Industry specialists give advice, tips and tricks for operating a business, both domestically and abroad. UPCOMING DISPATCHES Where Slick World is going next, and how you can be a part of the action.
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From the Editor

kathryn engel
slick world
Randy Vanderveen
s I was packing my bags for the second of two trips to Brazil for the preparation of this inaugural edition of Slick World Magazine, yet another jaw-dropping oil and gas discovery was made in the pre-salt resource play off the coast of Rio de Janeiro and So Paulo. It served as a further testament to why Brazil was the natural venue Title Space in which to launch a fresh new Canadian publication deis Here signed to get an unprecedented inside view of the most promising foreign markets for brave, bold Canadian entrepreneurs undefined by geographical or political borders. No sooner than the product concept itself was initiated and the publishers at Slick International were getting a big international YES from the likes of Canadian companies interested in international work, asutatum in erostrudCanadian governmentdelit diam, con well as countless tionsequisi ex eugue reping eugiamet dolore tionse tat. Ut wis ad er adipresentatives at home and abroad who were eager to see more acipsustrud et lamet luptat, volorem velenisci ting eu feuisl ilisl utpat ut wiscil diamconullam estin ute facin Canadians showcased. And especially on an international scale, guer sustio odipsummy nim ip etuer si blandre mincil irit, eum et augiam dio odipit, cortion volorpero esse their entrepreneurial prowess globally, as well as their contrifor si. molor sum ad minci tie minim zzrit, quat. Oloreet lorero butions to Canadian-enhanced trade efforts. Shortly after the Slick nostrud tis atet ullandit ad dolessed the Is nibh eummy World editorial department decided elit delis nulput vullaor peraesto odit lut alit autpat. Essectem best cover story forncinit acipissue would beconullaoreholding ex ex eriusci a launch ex essi blaore the man dolutet illut volobore dolor sisi. Canadas top job in international trade, we tagged along to an lore minim in volobore esed modigniam veniam, commy Ver auguerosto od dolor sed estrud dolore tat, quis doopening of a trade office for a feature interview with Canadian nullan Trade Minister Stockwell Day in sed magnibh lorero odionsequam iril et verit iuscinim dunt vero cortin International heniam, velesectem il deliqui blaor Recife, Brazil. velisi tincipsum ver se dolore del et adit lore dunt ute eros There, er sent augait nos the fifth of six trade nulla faci esecte Day would open autat nim zzrilla alit offices in Brazil, further reinforcingeugait, consenim dolenim dolorercipis aute elendio ex Canadas recognition of the true southern sueriustio commod digna facipsum non vel esent lan hendit perpower Brazil appears zzrilit lametbecome in the near future. velit estie diatem destined to niat atisis auguerat. Ut vevelesto dolor iusci blam del iuscin vulla cortie dignibh er The pace at which the economic power of Brazil is moving is lessed ex even for journalists am, have witnessed the sim dolortis alit praesto odiam, qui bla faccumm odolor truly staggeringexero commodit lorem who sum quissen issecte adiamco mmodio conulla feuis nim etue do con volore of the last vullutatem init nulluptatie do od magnim quis likes doloreet Alberta boom. dunt lobortie tem et at. By all nim zzriure etum iustie coreros on- andmodolendre erci accounts, what has been found augue off-shore Brazil amounts to the largest discoveries of heniat ipsustorecent history. tat luptatue dunt iure consAn oil and gas in et, consenim Rud do conulla core feugait, si. It amounts to some 100feuguer barrels of oil in a jurisdiction as incipsum zzrilla billion aesenit iusto con henim in ulla Percin ea auguerit la augait wissi. politically stable as that of Canadas oil sands, with a fraction of faciliquisit ut at vel ing eumsandit wis nulputat, veliquat. Nit in ut dolendionsed molobore do odolupt atissit the price tag (economically and environmentally) attached to adit ing elessequipit wisl ulla adit num nonum irillam exploration. Christensen Shipyards Ltd. etuerostie ming ea feu feuis at. Duisi. And for any appreciator of the histories of economies around Tevis O Sample, Art study the Na am amcommy nis augait luptat, volorperci blandre do- the planet, one cantDirector graceful rise of Brazil to becoming a true international economic force without one conumsandre dolobore te dolor am, quat. Ciduis nulput lorer senibh ea feum numsandre consectem num am et enemy (and therefore the need for military spending), am vullaor secte esequat lan utem nim ipsustrud tatie wis eugiamet do del exerilla feugiam, con ullum dolesto without developing a deep love and admiration for conulla ortissedcomplex economic andcor sum alisl ulla commodit eugiam, suscilit iustrud tat ad mincilit erat this richly er aliquate velit vel ea cultural portrait feugait wis nibh ex essis nullaor sim iusciduis dolore feuveniam, quiscilit, sustin henisit la feum in ullummod that is the beautiful and elegant Brasil. Its a hard place to leave. But before we do, eugait giat ummoluptatem velit, sequamet, quisl exero join us magna commy nim ilis augait alisit, venis dolent alit ad venibhin this first issue of Slick World as wefeuisi up with ent in hendrer acipissed tinci bla meet tem dotet landre magna con utat inim et ipsum iriliquisl ipsusci Canadians doing business in Brazil currently, and lorem vercipisi. tie vendre delit ip eummolobor iureet am dolorem ing el some smart enough to start positioning themselves Exerat,to do so. This issues alsofeugait lan hent wis essi. vel do eum veliquisci bla features key interviews incidunt nullandit veliqui exer sim il ulpute dipsum zzriSan venis et el del dolore molor sequam dolortionum top ustie do odolestio corperiure tatet dolore commy nostrud with Minister Stockwell Day, and Petrobras alit brass, Charles aut at aliqui et, authentic admiravullaore tatisse quisit Labrunie, whose con ullamcommy tinibh ex ea commy nos nulla feuisim irit iusci tat. tion for Canadians proved helpful at a euis. oil niam delisi euis dolorerostin veliqua mcorting recent Na augiamet vel inim quatis nostrud endit laoreetum
Title Space is Here
show in Rio de Janeiro, where he allowed Slick World direct access through a mass of Brazilian cameramen and reporters to a lingering private exclusive interview for this edition. These days, Petrobrass popularity is akin to football players and American rockstars in Brazil, and is seen as a source of greatly-needed development for many of the 190 million people here who remain in sadly deplorable living conditions. Well also catch up with the heads of both the Canadian/Brazilian Chamber and Export Development Canada, who unveil details of Canadian investment and opportunities in Brazil I trust you will find as fascinating as I did in conversation here in Rio recently. Meanwhile, back home, we will bring you a whole lineup of Western Canadian news from among the most experienced and varied journalists in the business, bringing you reports from Fort McMurray, B.C., Alberta and Saskatchewan. Read on for more. And fan alert, we are also thrilled to bring you a report right from the pit of CBCs Dragons Den in each issue, beginning with a dialogue I had recently back home with the ultimate marketing guru of the west, Arlene Dickinson, who I can gladly report has since become a new favourite personal source of inspiration. Sorry, Arlene, Im blowing your cover. The CBC marketing teams images of you belie the kind, gentle, thoughtful and compassionate encounter to which I was awarded in a recent conversation. Welcome to the first of what will be monthly issues of Slick World Magazine. I can tell you everyone involved with every aspect of this product from the publishing and editorial staff, contributing writers, designers, marketing, development and sales teams both in Canada, the U.S. and in South America, contributing bureau chiefs and the printing company chosen because of its unparalleled pledge to quality is 100 per cent committed to producing a resourceful and engaging publication we trust wont soon end up in a recycling bin. We collectively aim to deliver the most comprehensive source of Western Canadian news surrounding one new foreign market in each month that will matter to our readers now, and in the future. Its a Slick World out there, and were happy to have our readership along in its exploration. Get to know us, tell us about yourself and your entrepreneurial passion both at home and abroad and always, keep in touch. We intend for this magazine to be used as a resource of valuable information and, at the same time, help you connect with other businesses for the expansion of your excellence in service and product. Drop us a line and let us know how we can continue to augment our service to you as a reader and advertiser.
Jeff McCoshen
Kathryn Engel
editor, slickworld
slick world
experience
the people the technology the service
1 1 75 5 - 1 0 8 Ave nu e, Ed m o nto n , Al b e r t a T 5 H 1 B 8 Phone 780.455.8885 Fax 780.455.8882 www.mcprint .ca
T R A D I T I O N
O F
E X C E L L E N C E
Contributors
Meet some of the journalists who helped bring this issue of Slick World to you.
Erika Sherk
A graduate of Carleton Universitys journalism program in Ottawa, Erika cut her teeth reporting in Canadas North as a reporter and then business editor in Yellowknife, N.W.T. Tiring of iced eyelashes, she left for the Middle East, taking the role of news editor for Egypt Today and Business Today Egypt in Cairo. Returning to Canada, Erikas splitting her time between business writing for Slick World and reporting in Iqaluit, NU.
Chelsea Cook
Chelsea is a globetrotting photojournalist, whose passion for photography was born during journalism school. Her recent articles from abroad include pieces on Bali and Mexico. Chelsea also held a successful photo gallery show at PhotoSpace Gallery in Calgary.
James Chester
After studying Arabic in the UK, James moved to Egypt and began his career in journalism as an associate editor. Moving on from Middle Eastern business and energy news, he reported community news in the UK and for Northern News Services Ltd. in N.W.T. 11
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Slick World Journal

World news that matters to Western Canadians in business
Brazils time
Rio de Janeiro realizes Olympic-size dream he Brazilian president known as the most currently charmed world leader in the midst of a string of good international news was granted his latest wish
It is time to light the Olympic torch in a tropical country, Lulu told the IOC as it gathered in Copenhagen to select a site for the 2016 Summer Olympics. It is Brazils time. On Oct. 2, Rio de Janeiro won the bid at the expense of Madrid, Tokyo and Chicago to become the first South American city to host the Games. No developing country has hosted the event since 1968 in Mexico City, when hundreds of pro-democracy protestors were massacred by Mexican soldiers. Through its decision to give the nod to Rio, the IOC rec-
when the International Olympic Committee (IOC) announced the city of Rio de Janeiro would play host to the
2016 Summer Olympic Games. President Lulu (Luiz Inacio Lula da Silva) brought his passionate appeal to bring the Olympics to South America for the first time.
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Wikimedia Commons
ognized the widely-held view that Brazils current unique mix of successful market economics and forwardthinking social policies have made it the only Latin American country prepared and capable of hosting the event. President Lulu made a strong case surrounding the fact Brazil is home to a strong democracy and the only nation among the worlds 10 largest economies never to have hosted the Olympics. Rio de Janeiro presented the IOC with a very strong technical bid, built upon a vision of the Games being a celebration of the athletes and sport, as well as providing the opportunity for the city, region and country to deliver their broader long-term aspirations for the future, said an excited IOC President Jacques Rogge following the announcement. This call to live
your passion clearly struck a chord with my fellow members, and we now look forward to seeing Rio de Janeiro staging the first Olympic Games on the continent of South America. Well done, Rio! Despite the weight of the enormous structural challenges of preparing for the event, athletes will compete in such emblematic venues as the Maracan soccer stadium the largest in South America while rowers will make their way through Rios blue waters beneath the outstretched arms of the famous Christ the Redeemer statue overlooking the city. The Brazilians generous soul will make the most extraordinary Olympics the world has ever seen, President Lulu said in his plea for the event. Rio was widely regarded as the city which most needed the infrastructure improvements required to host the
Olympic Games. The infrastructure projects will receive 72 per cent of the total budget, which was set at 14 billion USD the highest among the candidates. The news follows a string of success for Brazil, including ongoing announcements of discoveries of amongst the largest oil and gas reserves in the world, already igniting an influx of interest in foreign and domestic investment. Extreme social inequities are starting to decrease, and President Lulu says the Olympics will strengthen his countrys overall gains in development. They say Brazil is a Third World country. Many say that. We need to improve health and education, he said. Yes, we have much work ahead of us. But we are a huge country and receiving the Olympic Games will only help. Respect is good, and today we received it, he said.
Wikimedia Commons
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Challenge to tradition unveiled
Layoffs loom for Saskatchewan potash giant
Muslim Canadian Congress calls for ban on the wearing of traditional Muslim garments he founder of the Muslim Canadian Congress tells Slick World the time is now to eradicate what he calls a medieval and misogynist tradition that has no place in a modern society supportive of gender equality. Tarek Fatah spoke to Slick World from his Toronto office from which the call for a Canadian federal government ban on the wearing of traditional Muslim garments, including the burqa and the niqab, was put forward. This tribal custom has no place in Canadian society, says Fatah, whose call for the ban follows a growing movement in places like France and Denmark from high-level Muslim officials to have the tradition put to the test in modern-day society. It is a tradition that is being pushed on women by the Taliban and al Quaida through brainwashing of women about the evils of Western society and one that is sadly growing in popularity because of that brainwashing. Fatah says there is nothing in the fundamental Islamic texts, including the Koran, calling for a covering of the face. The only reason one would do so is as a way to demonstrate the thinking that, The rest of the society is so satanic I have to cover my face in shame. I dont understand why it cant be understood that we are using our principals of Western civilization to help destroy it. It is our role as a congress to help protect and promote Muslim society and gender equality across our society. Fatah says the call for the ban also addresses a huge security concern, citing specific bank robberies in North Carolina, Toronto and the United Kingdom by men dressed in burqas posing as women. The call for the ban immediately follows a monumental decision by Egypts top Islamic cleric, who announced students and teachers will not be allowed to wear niqabs in classrooms and dormitories of Sunni Islams premier institute of learning, al-Azhar in Cairo, as part of a larger government effort to curb radical Islamic practices. Sheik of al-Azhar Mohammed Sayyed Tantawi joined a growing voice of scholars across the international community saying the veil is not required, but is merely a custom dating back to nomadic societies living in the Arabian desert predating Islam when he publicly announced the niqab, has nothing to do with Islam.
Slumping grain prices, loss of China as market cited as factors otash Corp. of Saskatchewan, the worlds largest potash producer, recently announced layoffs of 700 of its hourly employees at its Lanigan and Rocanville mines and cut its full-year profit forecast due to low potash prices. The producer of fertilizer, industrial and animal feed products whose main business focus is potash, says demand for potash is down and it has been stockpiling inventory extensively awaiting market upswings. Potash Corp. cites this years absence of one of its main markets, China, which it says would normally have accounted for a significant amount of current production. Sales are also down, it says, across the U.S. Prices of the nutrient had exceeded a record $1,000 a ton in some regions last fall, and collapsed to less than half of that since, as farmers around the world cut purchases because of slumping grain prices. The company already trimmed a 2010 forecast to 50 million from 55 million tons, and lowered its fullyear profit goal. For 2009, worldwide shipments will be down around 40 per cent from last year, according to international industry watchers. Analysts also say China is not expected to start buying potash until early next year. PCS says the layoffs are scheduled to take effect this month.
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IEA projecting improved economic growth
Demand from developing countries spurs higher oil and gas forecasts from international agency he International Energy Agency, which watches and forecasts the global energy market and advises oilconsuming countries, says faster than expected economic growth, in developing markets, will drive demand for oil faster than first believed. Demand for world oil, says the IEA, will grow in reflection of that of the overall economy. In its monthly report, the Paris-based agency, which advises 28 industrialized economies, increased its global oil demand growth estimate for 2010 to 1.42 million barrels per day (bpd), up 150,000 bpd from its previous projection. Upon release of the IEAs forecast, oil prices increased to $71.77 USD/barrel.
The IEA says crude oil demand would reach 86.1 million barrels a day in 2010, up 1.7 per cent from this year. Thats an increase from IEAs forecast from last month which projected oil demand of 85.7 million barrels a day in 2010. The IEA points to brighter economic projections across the board, as reflected in the International Monetary Funds recent declaration that a global recovery has already been put in motion, in its expectation that the world demand for oil would average 86.05 million bpd next year. The IEA also bumped up estimates for the rest of 2009, saying demand in the fourth quarter would average 85.2 million bpd, 530,000 bpd more than expected last month and up from the 2009 low of 84.1 million bpd in the second quarter. The IMF says world output will grow by 3.1 per cent in
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2010, more than the group had earlier predicted, and that the growth will be led by the worlds second-largest oil consumer, China. At the same time, new data from the U.S. and Asia also point to greatthan-expected recovery rates, further raising expectations for higher oil demand, says the IEA.
Canadian economy showing signs of recovery
More than 30,000 new jobs created; interest rate holds steady for now anadas economy made some impressive wins this fall, gaining a surprising average of close to 31,000 jobs in the month of September alone, says Statistics Canada (92,000 full-time gains, 61,000 part-time losses). Driven largely by an overall increase in full-time work, StatsCan says the countrys economy is showing strong signs of recovery from its first recession since the early 1990s. The unemployment rate fell by 0.3 percentage points to 8.4 per cent the
first monthly decline since the beginning of the labour market downturn in the fall of 2008. The increase in full-time work was mainly among youths and women aged 25 and over and in Ontario. Construction, manufacturing and educational services saw employment increases in September, while there were declines in transportation and warehousing, says the federal agency. The report also found employment in the depressed manufacturing sector increased by 26,000 in September the first marked increase since February 2009. Employment in construction rose in September by 25,000 and educational services saw a gain of 18,000 jobs. Upon the news for StatsCan, the loonie reached over 95 cents US, higher than its been in a year, and caused speculation about the possibility of it again reaching parity with the U.S. dollar, and what the overall good news meant for Canadas interest rate. This bird can sing, were the comments from Bank of Montreal economist, Douglas Porter in his regular public morning note upon the news of the loonies strength. Economists across the country were quick to respond to the news of growth, saying the unexpected growth will give the Bank of Canada extra impetus to focus on the timing of interest rate increases in the future, especially considering the banks previous conditional commitment to hold interest rates at the current level until the second quarter of next year. The Reserve Bank of Australia became the first of the G20 nations to raise in-
terest rates since the onset of the recession a sign of domestic confidence in its economic future. Australia also experienced an expected decrease in its unemployment rate at the same time as that of Canada, when local the local jobless rate fell to 5.7 per cent. The Australian interest rate moved to 3.25 per cent from a 49-year low of 3.0 per cent and markets around the world were boosted by the decision almost immediately. Through a banking system which shares that of Canadas international reputation for stability, coupled with strong demand from China for Australian iron ore and other minerals, as well as a domestic stimulus package, Australia weathered the worst global downturn in decades better than other developed countries. Meanwhile, the European Central Bank recently announced a continued hold on its benchmark interest rate at a record-low 1.0 per cent. slickworldonline.com
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The Executive Reading Lounge

Looking in on whats at the front-and-centre of bookshelves of the business set of Western Canada
n each issue of Slick World, editorial staff will be introducing you to readers from Western Canada who were moved by a great book and are inclined to share it with their fellow business readers. Our intent is a celebration of books, as well as an introduction of our readers to their counterparts in a more intimate way. In each month, we will also be calling on our own Slick International (publishers of Slick World) broader staff for a brief word on their book of choice as well. To get us going, I thought Id give a nod to my own book club and our most recent read, The Book of Negroes (I made a gargantuan faux pas by missing our last sacred monthly meeting while being absent in preparation for this issue of Slick World, one I hope to amend here). Lawrence Hill and his masterpiece will, at once, leave you beaming with pride to be a Canadian and will forever reframe your understanding of the history of African slavery in a way no textbook will. The Book of Negroes has made a lasting contribution to Canadian fiction and lined itself up with the most important comments on the topic in existence and will make you shout out a huge, Bravo! Read on for this months recommendations, which Im sure will inspire you as much as the following accounts have inspired us here at Slick World. Happy reading, KE
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Crones Cequence Energy emerged in August of this year as the successor to the former Sabretooth Energy, which was recapitalized in a reverse takeover and repopulated with Crone at the helm. Crone came out of retirement at the ripe old age of 46 after having been relatively idle since his Cequel Energy was merged with Progress Energy in a $1-billion deal in July 2004. Prior to Cequel, Crone was involved with the establishment of the highly-successful public energy companies, Cyries Energy and Cypress Energy. Cequence trades under the symbol CQE.
Howard Crone
CEO of Cequence Energy, Calgary The Wilbur Smith Series, Wilbur Smith After a trip to South Africa a few years ago, I really sank my teeth into the entire series of 31 Wilbur Smith novels, I couldnt get enough! I loved visiting the southern region of Africa so much, and this whole collection of books just kept that alive for me for long after. I love the way Smith imposes his characters directly into real historical events. His books are largely focused around two families, the Courtneys and the Ballantynes, one is a military family and one is a merchant family. He wrote a complete series on both and, at times, that series intertwine. His writing is just so complex, he writes forward from a historical point all the way up until current events, and then after writing about apartheid and events leading to currentday Africa, he starts going back again through history. I love the way he injects character into history he includes Cecil Rhodes in an entire series, who was also pivotal in diamond and gold mining and deeply involved in the colonization by the English of all of Southern Africa, not just South Africa. So, for me, it is just interesting to read about African history in an engaging way. I just find his writing captivating and interesting about African history, while still being great escapist reading at the same time.
Rudy Kitcher
Vancouver immigration lawyer The Omnivores Dilemma: A Natural History of Four Meals, Michael Pollan This is an absolutely fascinating account from a journalist about the details of where food comes from and the effect of the globalization of food on our lives. He dissects different types of meals and walks you through with a nonpreachy, factual account of the production of each part of the meal. I learned so much about things like how the cheap production of corn, for example, is affecting our entire water systems and land quality in North America. Twenty five per cent of all products for sale in a supermarket contain corn in some way were producing so much cheap corn pumped full of nitrates all derived from petrochemicals, and to read about what that is doing to our water and land is really shocking and unbelievable. That is also all connected to the production of meat cows, for example.
Now weve taken this ruminant designed to eat grass and what you now have are these animals in enormous feedlots which never eat grass, and they are sick and pumped full of penicillin and antibiotics and fed to us. Im really in favour of globalization, I think its crucial to open up the world economy, but what I realize reading this book is that that just doesnt work with food people eat. Even looking at the organic industry, as soon as you try to mass produce food, serious problems are raised everything from soil quality to immigrant labour problems. The book introduces you to a more modern European view, and in Europe they drive around with bumper stickers that read, Eat Your View, and now I understand what that means after reading this book. When I drive out of town from my Vancouver home, I love seeing the countryside and all the small farms and the book challenges you, if you love seeing that, you simply have to be more cognizant of your food choices and support those farmers. Once you educate yourself on the mass production of food and how that translates to our society, you can either try to ignore it, or change your habits. My wife and I have three young sons and we want to make smarter choices that feel better, minor changes. We just bought a lamb from a guy at our farmers market we know the guy, hes a great guy, and we know how he feeds his animals and it just feels right. I went fishing and caught 100 pounds of salmon, and were trying to buy more local fruit and produce. Things just taste better grown more locally and I feel better knowing Im making a better decision. Id highly recommend this book; it will change the way you think about food. Rudolf J. Kischer is a partner at the law firm of Maynard Kischer Stojicevic located in the trendy Yaletown District of Vancouver B.C. He practices in the area of business immigration and citizenship law. 19
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Calgary WorldSkills
Competition unites next generation of the world
chelsea cook
heres no dismissing the importance of having an appearance at a WorldSkills Competition on a resume. Having competed in a WorldSkills Competition, these young professionals really have a global passport for the rest of their lives they can work anywhere they want to, said Richard Walker, president and CEO of WorldSkills Calgary 2009. The 40th WorldSkills Competition in Calgary, Alberta wrapped up with Olympic Games-like spirit after showcasing 900 of the best young skills, trade and technologies professionals going for gold.
This major international competition inspired the next generation to broaden the view of their profession and career options, and also expanded some adults understanding of different working techniques. Competitors ages 17 to 22 from more than 50 WorldSkills International member countries spanning six of the worlds continents worked alone or in teams to complete time-limited challenging projects over four days. International delegates viewed the 45 different skills categories that were part of the competition. The events covered a broad spectrum of careers including cooking,
Turkish competitor Kumru Kodamanoglu puts the finishing touches on her handcrafted, originally designed wedding gown during the final hours of the competition.
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hairdressing, dressmaking as well as welding, machining, manufacturing and engineering technology. Slick World asked contributing writer Chelsea Cook to take in the final day of the competition and provide our readers with a snapshot of some of the activity and individuals involved.
(TOP) Samuel Chabot of Quebec earned a Medallion of Excellence in the mens hairdressing competition, as did Dan Van Holst of Waterloo, Ontario (RIGHT).
Fashion Technology
One of the more amazing performances at the competition was turned in by 2009 gold medalist Carol Sidler from Switzerland. She designed and handcrafted a wedding gown made of ivory and champagne pink fabric gathered on the skirt by hand-made roses in four days. A Swiss onlooker and fan from Sidlers home country, Ruth Schweizer says, (Sidler) apprenticed 3,000 hours to compete in the competition, 1,500
Chelsea Cook / Skills Canada/Comptences Canada
of which took place on her own time. The dress is gorgeous and its entirely her own design. Japanese competitor Miki Chiba said sewing is her favourite part of the skill. She said, fashion technology is all about creativity and I am giving it 100 per cent of my effort. All wedding dresses made by 14 young fashion designers were designed for the cure says Brenda Speirs-Fryatt, Fashion Technology workshop supervisor, and donated for auction with proceeds going to cancer research for the Canadian Cancer Society.
CNC Milling
CNC Milling involves cutting metal 21
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Chelsea Cook / Skills Canada
materials with computer numerically controlled (CNC) milling machines. The team from Germany included an expert and a competitor, who worked hard day and night to complete the competition. Trainer Herbert Mattes, head of the Chiron training centre in Germany for CNC Milling that has about 100 students in different trades, proudly said this is a great experience for me. Mattes, who was attending his third WorldSkills competition, worked feverishly in the evening making the program and drawings for CNC Milling German competitor Andreas Seeburger to complete. After nearly three hours designing the program, he was machining with great fervour on the final day of competition.
It can take up to six hours to complete one piece, says Mattes with respect to manufacturing parts on the machine. The hard work didnt result in a gold medal, but a respectable eight-place result. In total, four pieces were required to be made for this competition. Tools, offsets and clamps were manufactured; some parts were made for car manufacturers such as Hyundai by the Korean team.
LEFT: CNC Milling competitor Andreas Seeburger, (right) from Germany works alongside competitor Danilo Silva, (left) from Brazil on the milling machines that create tools, offsets, and clamps on machines. RIGHT: Mark-Olivier Blanger of Mirabel, Quebec won a Medallion of Excellence for his efforts in the welding competition.
Welding
The welding challenge utilized pressure testing to see if the vessels competitors made were watertight. Team Sweden was the last to compete, using water in the welding technique used to assemble the vessel. The team was fiercely trying to make a vessel that tested to be leak-proof.
When asked if the Swedish family waving their flags was nervous for the team Adam Carlsson said, I am very nervous for my country right now. I hope this vessel will not leak. True to form, their final vessel tested to be a success. Team Sweden members rejoiced as the judge shook their hands and the expert was proud of their work, and shook hands with the Swedish family, who also exchanged Swedish niceties, while cheering their home team on with flags. Although the team did not garner a medal, Swedish team members were
proud of their work and cranked out 20 vessels over the course of the welding competition.
Manufacturing Team Challenge

A generator was made for a handcrafted exercise machine that had to be able to hold power for five minutes in length. The challenge theme was renewable energy and sustainability with power generation. Testing the project employed movements by a swim team on exercise equipment a spectacle that drew a packed audience. Notably, this was the first WorldSkills Competition to focus on a sustainable design and to conduct an environmental audit. slickworldonline.com
Team Sweden completes Welding skills competition building a vessel with a welding technique using water from a program made by Competitor, Karl Johansson, and with the help of Dhafer Tanazefti, from Tunisia.
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Goliath
Wont Be Stopped
james chester
hese days, the Town of Fort McMurray reaches much farther than its city limits. Executives in Calgary and families in Newfoundland alike have come to depend on the oil sands deposits around the town for their livelihoods. Environmental activists denounce the operators of the oil sands as climate criminals. In the frenzied debate, there is often little room for the business story of the oil sands. The recession of the past year has not hit the industry as hard as some people might have thought it would, but it has certainly had an impact. Weve had to revise figures on a number of different options but were still pretty confident in the oil sands, says Tim Markle, public affairs officer at the provincial governments Alberta Energy. Oil sands spending over the next 11 years, reports the Canadian Energy Research Institute (CERI), will be modest. Nevertheless, IHS Cambridge Energy Research Associates (IHS CERA) says world oil demand will rebound from a low of 83.8 million barrels per day (bpd) this year to its 2007 high of 86.5 million bpd by 2012. And developers of the second largest deposits after Saudi Arabias oilfields are ready for the resurgence.
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James Chester
Perspectives on the Recession

Talking to most oil companies and industry representatives, its hard to believe the downturn ever hit the industry at all. Don Thompson is president of the Oil Sands Developers Group (OSDG), which represents 26 oil sands operators. For projects that are up and running, the effect of falling crude oil prices has been very minimal, he says. The way you approach operations in a high crude price and in a low crude price is exactly the same. You want to maximize your production, so the falling crude oil price has not impacted operating workforces and operating plants and projects in the region. If anything, its refocused them on the need to be safe, reliable, productive and efficient every day. Suncor, which operates the first oil sands project that was started in 1967, lowered its costs per barrel by increasing production. In the second quarter of 2009, it cost Suncor $31.30 Cdn to produce a barrel of crude oil. In the second quarter of 2008 it cost $50.85. But a look at the bottom line tells a different story. Despite increased production and cheaper energy input prices, Suncor still had a net loss in the second quarter this year of $51 million. This time last year, the company brought in $829 million. Maintenance at the other big oil sands player, Syncrude, caused a drop in production that brought the cost of producing a barrel of crude in the second quarter to $50.23, up from $41.92 a year before. The Canadian Oil Sands Trust, which owns 36.74 per cent of Syncrude, reported a net income of $46 million in the second quarter, compared to $497 in the same period in 2008. While operations continued, many projects in the planning or construction phases, such as Suncors Voyageur upgrader and Firebag mine expansion, were put on hold. The number of workers in construction camps fell over the past year from 27,000 to 20,000, according to the OSDG. In its study released July 2009, Economic Impacts of the Petroleum Industry in Canada, CERI reports, the CERI 2009 Economic Slowdown Projection indicates that $218 billion will be invested in the oil sands for new production (from 2009 to 2020). This is $97 billion less than previously projected under the CERI Reference Case Projection (2008). Yet companies such as Shell, Connacher, Devon and Imperial have continued to develop and expand and there has been no change in the numbers of operating and maintenance staff.
Don Thompson, president of the Oil Sands Developers Group, says falling crude prices have prompted oil sands operators to refocus and become even more efficient.
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in indoor and outdoor sports, featuring Arctic Sports and Dene Games.
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Explore the history of the Arctic Winter Games with this unique exhibition by the Alaska State Museum. Hundreds of historical Games items including team uniforms, posters and over 1,000 Arctic Winter Games pins. For more information on visiting the Grande Prairie region: Call 1-866-202-2202 or visit www.gptourism.ca
News of Suncors merger with PetroCanada, creating Canadas largest energy company, U.S. approval of the Enbridge Clipper pipeline from Alberta to Wisconsin, and the $1.9-billion PetroChina investment in 60 per cent of Athabasca Oil Sands Corp., has given the impression that oil sands is a sound investment. And although the figures look bad, for existing operations at oil sands facilities around Fort McMurray, its business as usual. Cheryl Robb, a spokeswoman at Syncrude, states we (produce) oil whether its $30 a barrel or $140 a barrel. Were still seeing production grow
from projects that are underway in Fort McMurray even during this period of what has been relatively low prices, adds Greg Stringham, vicepresident of oil sands and markets at the Canadian Association of Petroleum Producers (CAPP). And that momentum is very typical of the oil sands, he says. It takes six or seven years to put a project into place, and so if there is a downturn, it takes a long time to slow them down.
Oil Sands Optimism

Albertas oil sands are found in three deposit regions Cold Lake, Peace River
and Athabasca. Fort McMurray is in the Athabasca deposit region, which contains 80 per cent of the oil sands reserves and is the only place where the oil is close enough to the surface to be mined. Currently the 12 operating oil sands facilities in the Athabasca deposit region produce 1.175 billion barrels of bitumen per day, 835,000 bpd of which is upgraded from bitumen to crude oil in Alberta. Six facilities are under construction in the Athabasca region and all will be producing by 2011, according to the OSDG. The biggest project currently under construction is Imperials recently-announced Ke-
Its full speed ahead for oilsands operators in the Fort McMurray area, who are banking on an eventual turnaround in the demand for oil on the world stage and, as a result, a rebound in crude prices.
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arl Lake mine, with a capacity of 300,000 bpd rivalling Suncors and Syncrudes 350,000 bpd facilities. The first phase of Kearl will be operational by 2012, with two phases to follow. In total, projects in the pipeline or under construction around Fort McMurray will be producing over 1.4 billion bpd by 2018. And with a rising oil price, those projects are looking a lot more appealing to investors. Its fair to say that the pace of growth is slower but, in reality, this year therell be $7-8 billion in this region spent on new growth and theres $18 billion a year spent on operating the existing plants (in the Atha-
basca deposit region), says Thompson. Thats a lot of money in a small area. Investors and workers have good reason to be confident, even after the last years financial results. Oil sands deposits produce around half of Canadas oil output but represent 97 per cent of the countrys reserves. And the 170 billion barrels recoverable by todays methods represents only 10 per cent of the total. Allan Fenerty, a workforce development instructor at the Suncor Energy Industrial Campus of Keyano College in Fort McMurray, has been teaching oil sands operatives for 20 years. Any of the slowdowns that Ive seen
have only typically ever lasted maybe a year and a half, two years max, he said. Theres only so much oil to go around. The world needs it because were just too dependent on it for too many things the resources are here, its just a matter of getting to them.
The In Situ Solution

The apparently crude methods big trucks, big holes and tailings ponds of oily waste belie the industrys technical complexity. Efficiency has been the main aim of the industrys drive to develop new technologies. Conventional drilling yields oil that can go di-
Peace River
Fort McMurray
Cold Lake
Edmonton
Calgary
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James Chester
Of the three oilsands deposit regions in Alberta, the Athabasca region contains 80 per cent of the oil sands reserves.
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rect to a refinery. Product from the oil sands has to be carried from a mine to an upgrader, which processes the bitumen into crude oil before it can be refined into a useable product. The process, therefore, is very costly. However, another factor has guided technological development 80 per cent of the deposits are too deep to be mined. The bitumen below 75 metres therefore needs to be extracted in situ that is, without trucks and shovels. The process is generally less expensive but yields less. The largest project under construction, EnCanas Christina Lake, will cost $1.4 billion and produce 40,000 bpd while the first phase alone of Imperials 300,000 bpd Kearl mine will cost $8 billion. Michael Burt is the vice-president and managing director of the In Situ Oil Sands Alliance (IOSA). The IOSA, formed just over a year and a half ago, represents exclusively in situ producers. Its almost identical to a conventional oil field in that there are small wellheads out in the landscape, he says. The most well-used in situ technology is steam-assisted gravity drainage (SAGD), which was first used around 20 years ago. The SAGD horizontal well pairs are drilled about five metres apart. The process involves the injection of steam into the ground. The steam melts the bitumen deposit, which can then be pumped out and upgraded. Other technologies use electricity, solvent injection or combustion (as in the process known as toe-to-heel air injection) to extract oil. These methods all have the advantage of producing oil that needs much less upgrading, as part of the process is done underground. They also cause very little immediate damage to the ecosystem above ground. Most of the technology thats going to be used in the future, and is growing quite rapidly every year, is going to be this in situ technology, says Burt. The number one issue for us is terrestrial disturbance. Were several orders of magnitude smaller than a mine when it comes to the amount of surslickworldonlinE.com
face land that we disturb. But in situ does have its Achilles heel: Because we typically are using steam to heat the reservoir, we use large amounts of natural gas so we can have sometimes a higher carbon footprint on a per-barrel basis than the mines, he says. The development of steam-assisted gravity drainage and horizontal drilling and all of its variants was just a game-changing nature for the industry, says Stringham. Not only does it open up the in situ resources that really had been stranded before, but it opened up the investment in the oil sands to not just the big companies. Currently in the Athabasca deposit region, seven out of 12 projects are in situ (including the Suncor Base Plant, which uses both mining and in situ). Five out of seven projects under construction are in situ projects. Most of these are found to the south of Fort McMurray. You have a lot of small independent in situ developers because capital is not as intensive for these projects to get your first phase up and running, says Burt. To develop these mines, typically, you need to have very deep pockets because the up-front capital expenditure is so high. Thats why there are lots and lots of in situ developers, he said. Ive been in the business a long time and I dont even know all of them.
Technology by Necessity
Owing to the relative novelty of the methods and its low impact visually, in situ technology focuses on higher production as well as lower energy input. However, mining has become much more concerned with environmental impact. Tailings ponds are one of the most damaging elements of the mining process. The ponds contain waste from the upgrading process suspended in
New technology has opened up in situ resource plays that previously were stranded, and has allowed some of the smaller players to get into the oil sands market.
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Different technologies offer options for extracting oil from raw bitumen (inset).
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James Chester / flickr.com
water and represent an environmental and public relations disaster. In April last year, approximately 1,600 ducks died when they landed on Syncrudes tailings pond north of Fort McMurray. The company pleaded not guilty to federal and provincial government charges of causing the deaths. The case will go to trial in Edmonton in March. The Alberta Energy Resources Conservation Board (ERCB) provided extra impetus to a cleanup with a directive in February. The legislation requires mining companies to reduce fluid tailings, store them in ERCB-approved areas and convert them to trafficable (dry) tailings. In response, mines are testing a range of technologies that cause the tailings to settle faster, or that quickly separate the tailings from water, such as centrifuge. Shell is just one company that is investing the company spent $100
million on a pilot plant at its Muskeg River project to try out the trafficable tailings technology. But the biggest challenge both mining and in situ projects face is how to deal with future emissions legislation. In 2007, Alberta was the first North American jurisdiction to introduce emissions intensity regulations, limiting the emissions per unit of economic activity. Companies emitting more than 100,000 tonnes of greenhouse gases had to reduce their emissions intensity by 12 per cent, or pay $15 per extra tonne of greenhouse gases (measured as carbon dioxide equivalent, the gass damaging effect compared to CO2) into a technology fund. They can also invest in an offset project. The scheme does not include a cap on overall emissions. Companies have to be well aware of the fact that advances in technology
and advances in new scientific findings (mean) Alberta will adapt accordingly to ensure that environmental needs meet the newer standards, says Markle. The industry is being pushed by legislation on environmental impacts that is forcing the oil sands industry to test new realms of technology that are very expensive to find and develop, says Fenerty. A lot of the people that are really concerned about the environment dont have a hope of finding that technology because they dont have the resources to even come near achieving it. The industry challenge now is the UN Climate Change Conference in Copenhagen in December. The conference aims to broker a deal for a successor to the Kyoto Protocol. Both provincial government and industry are anticipating a federal climate strategy that
could be damaging to the business of producing unconventional oil. The companies have proven they can cope and deal with legislation which they know and understand, says Stringham. The biggest difficulty is defining what that legislation is and what its going to be over the next decade. Capping emissions means capping growth and capping production in the oil sands and if society wants to do that,
I guess thats a choice they can make, says Thompson, but it will be a significant strain, I think, to deal with onerous carbon legislation.
The PR battle is also underway. The OSDG, IOSA, CAPP and individual companies consider it their responsibility to, as they see it, balance the debate. We havent maybe done as good a job as we can at informing the public about what measures we have in place to mitigate our environmental impact, says Robb. The environmental damage must be juxtaposed with the economic benefit. Canada supplies 19 per cent of the oil imported to the U.S., making it the United States biggest foreign supplier of oil. Mining and in situ processes are undisputedly more polluting than other sources of oil. According to IHS CERA, the production of crude from oil sands emits 30 to 70 per cent more pollution than oil from conventional sources. However, CERI projects the oil sands will directly, and indirectly, contribute $1.7 trillion to the Canadian GDP over the next 25 years. As long as theres a world thirst for oil, people know its here and one great thing about the oil sands is you dont have to explore for it, says Markle. The industry has ploughed through low pricing, technological hurdles and some very bad PR to emerge as a cornerstone of the Canadian economy. With demand on the increase again, the world will have to get used to unconventional oil. slickworldonline.com
Environment versus Economy

Syncrude is not waiting for the results of the conference to implement its $1.6-billion project to reduce sulphur dioxide emissions by 60 per cent at its site near Fort McMurray.
James Chester
Heavy equipment doesnt sit longer than a few days - just long enough to perform routine maintenance, as some of Fort McMurrays oil sands projects continue to move forward.
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The Boom Echoes, Still

james chester
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James Chester
n most parts of the world, a recession is a bad thing. But in Fort McMurray and the municipality of Wood Buffalo, where the population grew by 141.2 per cent from 1999 to 2008, the downturn was a relief. Wood Buffalo is an area under a lot of pressure. The municipal census of 2008 counted 103,334 residents in Fort McMurray and surrounding areas. Infrastructure creaked under the weight of 10.5 per cent average annual population growth. Businesses have struggled to access the land they need to expand. The downturn, many say, has given Fort McMurray time to prepare for the next wave of the oil rush. We had our issues long before the recession ever came along, says Jack Bonville, president of the Fort McMurray Chamber of Commerce. We were
growing really fast and that created a lot of issues infrastructure-wise for the community. When the recession actually came, he says, it was almost like a break. Sales, says Jason Vargo, general sales manager at Alberta Motor Products, went from completely insane to back to normal. The Regional Municipality of Wood Buffalo calculates that from 2002 to 2005, the growth of Fort McMurray accounted for 92 per cent of growth. The work camps at oil sands projects accounted for the other eight per cent. From 2005 to 2008, however, the camps accounted for 53 per cent and the town for only 35 per cent of growth. And this is where the recession hit hardest. The census reported the num-
ber of workers in project camps increased by 7,712 from 2007 to 2008. Yet with many projects put on hold, around 7,000 contract workers found themselves out of work in 2009, according to the Oil Sands Developers Group (OSDG) in Fort McMurray. In this region you have two separate workforces, says Jeff Penney, manager of economic development at the Regional Municipality of Wood Buffalo. Contract workers suffered, but as operations on existing oil sands projects continued, the majority of business was not adversely affected. From an internal standpoint for operational staff, it was basically business as usual, he says. And thats the people who typically support the business community in this region. The retail sector, the restaurants those guys
still had this big operational staff that needed support. Keyano Colleges Trades and Heavy Industrial Division in Fort McMurray specializes in operations and maintenance training, so officials there are not sucked into the peaks and troughs of the construction market. There has been a hesitancy to attend technical training with some uncertainty of employment afterwards, says Glenn vant Wout, dean of the Trades and Heavy Industrial Division at Keyano College. However, if it happens to be one of those job families that is not affected by the construction cycles (such as engineering) then we have, if anything, noticed an increase in attendance of technical training. The downturn in the construction sector has also provided some benefit to the community. Alberta Finance and Enterprises Alberta Economic Outlook: First Quarter Update 2009-2010, released August 2009, reported: Nonresidential construction costs were down 6.3 per cent in the first half of 2009 compared with the same period in 2008. Lower construction costs mean infrastructure improvements cost the provincial government and municipality less.
We are starting to see costs coming down and this will allow us to stretch our investment dollars, says Heather Kaszuba, spokeswoman for Alberta Transportation. A new five-lane bridge over the Athabasca River will cost $127 million and is scheduled to open in 2011. Work on a bridge at the Thickwood Boulevard and Confederation Way interchange began in fall 2008 and the second phase is due to begin this fall. The province also plans to twin Highway 63 south from Fort McMurray to the junction of Highway 55, a project Kaszuba stated will cost more than $1 billion. Sixteen kilometres to the south of the city and 17 kilometres of twinning between the Suncor and Syncrude oil sands projects have already been completed. Last year, Suncor paid for the construction of the $55-million interchange linking its base plant and upgrader to Highway 63. The rapid growth due to the oil sands industry has brought its own challenges to Fort McMurray. Its great that there are so many opportunities from a career standpoint but people want to be able to raise their kids, they want to have the types of services that you should have in a
community of this size, says Penney. The price of housing and leases during the boom period of the last decade have made doing business in Wood Buffalo very expensive, but the major barrier for businesses looking to set up shop in Fort McMurray is access to land. The Chamber of Commerce is also lobbying for more commercial access to Crown land, says Bonville. We have a significant deficiency in commercial land right now and until we make some progress on alleviating that deficiency, its going to be difficult not only to attract new business but to encourage local business to expand, says Penney. With the announcement of new projects the biggest being Imperial Oils Kearl Lake the oil sands industry threatens to drag the regions businesses into another period of growth, albeit not as insane as the boom of the $147-barrel in 2008. Residents might have enjoyed the downturn, but in Fort McMurray, says Bonville, everybody thats here is here to service the oil sands industry. As oil sands moves forward, says Penney, the community moves forward. www.slickworldonline.com
James Chester
Glenn vant Wout of Keyano College in Fort McMurray has witnessed slick world an increase in attendance for certain types of technical training, such as engineering.
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BRAZIL
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t has a history of surprising the international business community, Brazil does. When the wildly-popular Luiz Incio Lula da Silva, or Lulu, first came to power seven years ago after years of serving in opposition, international investors fled the country en masse, fearing his calls for social-economic reforms. Since then, Brazils Bovespa, the So Paulo-based and largest stock market in Latin America, gained some 1,100 per cent more than the American S&P 500, which includes large publicly held companies that trade on either of the two largest stock markets, (NYSE Euronext and the NASDAQ OMX) did in the same time period. While the rest of the global marketplace continued to linger in the wake of its collapse, the Bovespa grew and grew, increasing 180 per cent since last November alone. The more fearful of the international investment community have been watching and waiting, expecting that such sweltering of a classic emerging market must surely overheat. But the greater the anticipation for a breakdown takes hold, the more Brazil continues to show up economically, again and again. But increasingly, as the weeks and months progress, the international community is taking notice. Just at press time, one of Europes largest banks raised more than $8 billion from the listing of its Brazilian subsidiary in the worlds largest initial public offering this year in a string of financially astounding recent events that has the international community turned on its ear. Canada, notwithstanding. With an untouchable reputation across South America for its great overall business model, one of the worlds most stable banking systems, a particularly-stellar name in leading oil and gas technology, and a supportive political environment to foster trade on both sides, Canadas time is ripe entrepreneurially in Brazil. As International Trade Minister Stockwell Day says, Canadians cant afford to not explore their options in foreign markets such as Brazil. In the pages ahead, join Slick World editor Kathryn Engel, who visited Brazil twice for the preparation of this issue, and discovered first-hand how everything from garnering the first hosting of the Olympic Games ever held in South America, to its constant string of announcements over increasingly plentiful resources all help equate in the possibility that Brazil may just go right on surprising the entire world, true to form.
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Brazil Beckons for Canadian Business

South American juggernaut seen as a land of opportunity
kathryn engel
hen New Yorks Goldman Sachs Group, Inc. coined the BRIC acronym referring to the worlds fastest-growing developing economies of Brazil, Russia, India and China in 2001, the theory was that at their then-current rates of growth, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world. Fast-forward to what has transpired in Brazil since that time, and economists worldwide now say that not only has Brazil stepped up to its leading role in the company of BRIC, but that developments over the last two years in the country have positioned it as at least the future superpower of the south. The World Economic Forum reports Brazil was the top country in what it calls the upward evolution of competitiveness in 2009, gaining eight positions among other countries, overcoming Russia for the first time, and partially closing the competitiveness gap with India and China among those BRIC economies. Dramatic new oil and gas discoveries located beneath a shifting layer of salt under the sea bed in what is now being called the pre-salt, or sub-salt, region contain at least eight billion barrels of oil in the prime area alone. Even
with local rules calling for the state-controlled Petrobras to have the largest role, international exploration companies from every corner of the globe are already eyeing up the possibilities in what is said to be the main deacon of possibility in an ongoing world oil and gas slump. Add to that an excellent relationship with hundreds of trading partners, and a service sector that leads its GDP (67 per cent), strength in industrial service and manufacturing, agriculture, and mining, wherein Canada plays an integral role, and the reasons are evident why the Canadian government has made Brazil among its key focuses. Canadas International Trade Minister Stockwell Day tells Slick World, the only Canadian media outlet at the recent opening of a new trade office in Recife, Brazil, that the country represents one of the strongest opportunities in the world for Canadian companies eager to expand into the foreign marketplace, and one Canada sees as one of its most important allies. The Americas are important, the hemisphere we share, we need to let them know we are here and that there are advantages of dealing with a stable government like Canada whose banking system has been acknowledged as the most stable banking system in the world, says Day. And because of our policies, the IMF (International Monetary
An aggressive approach to oil and gas exploration both on-shore and off-shore over the next few years in Brazil will have many foreign companies looking to tap into the marketplace, and International Trade Minister Stockwell Day says Canadian companies should step up and take a close look at some of those opportunities.
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(Our) Canada-U.S. trade relationship is the largest trade relationship between two countries in the world and it is the most historically-successful one. But, what were finding in an economic downturn (is) when America loses its buying power, if all your business eggs were in that basket, youll be in trouble, you wont be able to make omelettes. So what were saying, is, you cant afford not to check out the other opportunities around the world
Canadas International Trade Minister
~ Stockwell Day
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Wikimedia Commons
Fund), and the World Economic Forum, and the World Bank have all said Canada was one of the best prepared going into this downturn and will be one of the first coming out, and I believe that is because of our policies weve put in place competitive taxation (and a) common-sense regulatory regime. I believe we have a good blend of policies along with, in part, because of our climate we have learned what it means to develop environmental technologies, energy-saving technologies, which is a great fit for a nation like Brazil. It is in some current key areas, including oil and gas, Day feels that natural fit will really start to shine. Petrobras has stated its capital budget between now and 2013 will rise to $174 billion USD to, in large part, develop its on- and off-shore massive reserves, and that it will look to expertise and experience from elsewhere. Canada has already established itself as being home to one
of the most technologically-advanced industries on the planet. Couple that with the current eagerness for some Alberta companies to look elsewhere for oil and gas opportunities, and Day says a perfect match exists. Alberta companies, workers, have developed some amazing technologies when it comes to oil and gas and Brazil has also developed some striking technologies. Right now Alberta, of course, is working on its own royalty process and I wont speak directly to that but the Alberta oil and gas has been, and continues to be, a world leader. Technologies that have been developed in Alberta surrounding (factors like) climate, terrain, pipeline, storage, rejuvenation of wells, drilling, Alberta has done it all and will continue to do that. To inspire Canadian trade with Brazil, Days department has stepped up its efforts significantly. The investment story here in Brazil is
very good, weve got a Brazil plan, we want to see bilateral trade double by 2012, says Day, who met with Eduardo Henrique Accioly Campos, Governor of Pernambuco a northeastern state currently undergoing a development boom and with representatives of the regions business community to discuss enhanced co-operation in the areas of agriculture, energy and science and technology. We want our commercial relationship to keep growing, and thats why weve opened two new trade offices here, says Day. Canadian companies have proven to be world leaders, and their products are in high demand in key sectors in Brazil. Our government wants to help them to seize the opportunities. With the new Canadian trade office in Recife, followed by an additional one opened recently in Port Alegro, the total number of Canadian official presences in the country rises to six more
Government of Canada
Canadas International Trade Minister Stockwell Day meets with Eduardo Henrique Accioly Campos, Governor of Pernambuco, during the opening of a new trade office in Recife, Brazil.
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than any other countries around the world except India and the U.S. Its indicative of what Day calls a climate filled with opportunities for forwardthinking entrepreneurs. Accumulated investment from Brazil into Canada has, over the last several years, come out to $11 billion, and the other way around about $9 billion Canadian investment in Brazil. In 2008, Canadian exports to Brazil totalled $2.6 billion a 70 per cent increase over the previous year. Key exports to Brazil include fertilizers, mineral fuels and oils, salt, sulphur, cement, machinery, paper and paperboard. Day says President Luiz Incio Lula da Silvas (Lulu) economic reforms, coupled with Canadas increasing reputation as home to among the most stable banking systems in the world, have
led to an enhanced willingness on both sides to seek further opportunities for investment. President Lulu has followed economic reforms that were put in place 10 to 15 years ago economic reforms put in place to see increased prosperity to create a level playing field for workers and investors ... common-sense tactics, regulatory regime, predictable investment rules so people know their investments are going to be stable in terms of the laws of the land and they are the fourth largest democracy in the world, so all of that under Lulus leadership has led to continued economic growth. Canadas role, says Day, is to clear a path for savvy Canadians towards the opportunities. Our perspective, as a government policy, is make trade opportunities
The opening of two new trade offices in Brazil, including this one in Recife in northern Brazil, will only serve to enhance opportunities for Canadian entrepreneurs, says International Trade Minister Stockwell Day.
and business opportunities as obstacle-free as possible for Canadian workers, entrepreneurs, investors and producers. Thats the job of government. Thats why we will aggressively pursue, if not free-trade agreements, well pursue foreign investment protection agreements, science and technology and blue-sky agreements. That is why it is our policy to keep our taxes as low as possible and as you know (Brazil is) the most competitive of the G8 right now. The regulatory regime should be common sense and not overly burdensome. It is governments job to have all those things in place so
and technologies, we buy a lot of inorganic chemicals from Brazil there are so many natural commonalities (and) we try to enhance those through government policy. And Brazil, to its credit, is a fairly recent full-out democracy in the last 20 years. We really congratulate the government and people of Brazil for maintaining democratic policies that respect hard work and allow people to enjoy the fruits of their labour. And when it comes to working with Petrobras, the statecontrolled oil and gas giant, Day says the concept is not one that throws Canadians off when doing business. One of the things investors find in Canada we have some Canadian history of strong government involvement in business which I dont advocate but Canadian business people have had to deal with that. (Things like) PetroCanada, we have an airline that used to be pretty well nationalized, so Canadians have had to learn to adapt to that, but they also see the benefits of getting out of business.
ABOVE: The Petrobras P5 off-shore drilling rig is getting geared up for production. RIGHT: Brazilian President Lula da Silva has played a key role in allowing a democratic system to thrive in Brazil.
Wikimedia Commons
then our businesspeople, workers and producers will make the decisions on where they want to go. It is our job to make it obstacle-free and open the doors. So thats why we strike agreements with a country like Brazil which is a very strong economy fifth largest country in the world, 190 million people, but within that the middle class is estimated around 45 million, so the market opportunities based on a good historical relationship are abundant. And while the extended international community has its eye on Brazil right now, Day says the Canadian business community ... has some inherent advantages amid the prospects. The natural things in common we share oil and gas, agriculture, machinery four types of applications, communications
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MAIN IMAGE: Seashore and port infrastructure at Sao Francisco do Sul, Brazil. TOP INSET: Sea-going container ships like this connect Canadian industries to world markets. BOTTOM INSET: Stockwell Day goes on a tour of the Port of Suape in Recife, Brazil.
Wikimedia Commons
The global recession, adds Day, has actually provided impetus for keen and ready Canadian entrepreneurs by blowing wide open the playing field and stirring up some long-held truths. (Our) Canada-U.S. trade relationship is the largest trade relationship between two countries in the world and it is the most historically-successful one. But, what were finding in an economic downturn (is) when America loses its buying power, if all your business eggs were in that basket, youll be in trouble, you wont be able to make omelettes. So what were saying is you cant afford not to check out the other opportunities around the world and we as a government one phrase that has always terrified me is, Im from the government and Im here to help you but, in fact, we will help business by getting out of the way and removing obstacles. So we said to people in Canada, Look, weve put over two
Heavy investment in Western Canadian port infrastructure has made for more efficient commodity transportation to foreign markets.
billion dollars into developing port systems in Vancouver and Prince Rupert, weve got integrated road and rail systems, the sailing times are shorter between Asia and Vancouver than they are between Asia and Long Island or Seattle, the dwell times in our ports are less because they are not as congested and we can get your product to Chicago or Omaha in 100 hours, or rather, businesses can, because weve put the investments into infrastructure. And we need to do more; we need to always be saying how can we help Canadian businesses get more and more competitive? But thats our basic message to Canadian business you cant afford not to check out the opportunities internationally. slickworldonline.com
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PROMOTION
ENVIRONMENTALLY-RESPONSIBLE WASTEWATER
Ivanhoe has developed a solid reputation across Western Canada for its ingenious contributions to community development and is now poised to play a leading role in relevant, sustainable infrastructure in developing countries. Through its unparalleled Canadian innovations, Ivanhoe Contracting has responded to the old cumbersome, costly and bulky wastewater treatment systems of the past with unprecedented purity and ease. The solution-orientated wastewater treatment supply company known for pioneering the modern application of wastewater handling across northern Alberta in Canada has entered a new chapter in greener innovation. Ivanhoe is proud to introduce a leading-edge technological system that, for the first time, brings wastewater treatment up to speed with the kind of advances only seen in Europe, until now. Through the new Ceramic Membrane BioReactor (C-MBR) technology, the time it takes to transform residential sewage into a renewable, useable form of water as close to its original purity as possible is reduced to just hours. In Europe, the permeate from the C-MBR system is being recycled and used in accordance with European Bathing Standards for uses such as showering and laundry, not to mention the innumerable environmental benefits of a system that will accomplish what was considered unimaginable just a few years previously. By being able to provide remote, permanent and clean wastewater treatment systems, Ivanhoe Contracting is the provider of choice with its integral responses to infrastructure needs in some of Canadas most remote communities, including those of the countrys First Nations groups. Ivanhoes expertise and proven leadership in wastewater treatment is increasingly being recognized as the most costeffective and sustainable response to the need for increased
access to safe, clean water-treatment systems, improving the quality of life across Canadas network of First Nations communities. With an unshakable commitment to enhanced standards of living in areas of greatest need, the team of advanced Ivanhoe experts has already positioned itself to make a difference in communities where infrastructure improvements are in greatest demand across South America. With the advent of C-MBR technology, Ivanhoe has the capability of handling wastewater volumes from 2,500 gallons per day to one million gallons per day. That means the new system can transform residential sewage into pure water in communities of up to 20,000 people, opening up a world of opportunity in developing areas. Additionally, wastewater-process designs that incorporate the C-MBR technology can be implemented with a smaller infrastructure footprint as compared to designs utilizing activated sludge processes. To give an appreciation of the recyclability and safety of the permeate, E. coli bacteria is 35 times larger than the pore size of the membrane. That alone mitigates the need for intense and environmentally-harmful disinfection systems. The clean, clear resulting permeate may be used for dust control, down-hole drilling applications, irrigation, laundry, toilet and washing of vehicles. Along with First Nations and South American development, the Ivanhoe systems are a focus of current large work camps in the oil and gas industry, including recycling for drilling and fracing. They are perfectly adaptable to commercial developments, summer villages and any forward-thinking small municipality, as well as decentralized urban communities without access to municipal infrastructure. Wherever there is a call for pure wastewater solutions in an environmentally-forward way, Ivanhoe is committed to the response.
Providin g worldwide leadershi P in Purit y in was tewater treatment
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Extensive scientific testing and development has confirmed that Ivanhoes ceramic membrane treatment technology renders safe, clean water from once unuseable raw wastewater.
ENVIRONMENTALLY-RESPONSIBLE WASTEWATER
NORTH AMERICA TOLL FREE 1-866-IVANHOE (482-6463) LOCAL 780-538-3904 FAX 780-538-2857 WEB www.ivanhoewastewater.com
Why Brazil? Why Now?

kathryn engel
In all sectors in Brazil, we have open invitations for investment. We have an acceleration program in place, for example, that calls for $150 billion (USD) to be spent on upgrades in infrastructure which is fully open to foreign investment everything from water treatment to road construction, all forms of our infrastructure. ~ James Mohr-Bell
Brazil-Canada Chamber of Commerce
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ccording to one of the most well-respected agencies for regulatory arbitration and a driver of Canadian investment in Brazil,
inces in Canada. In any case, Mohr-Bell says the hurdles Canadians may not be used to clearing while doing business back home are well worth the effort considering Brazils promising investment climate, as indicated by all local signals. In all sectors in Brazil, we have open invitations for investment. We have an acceleration program in place, for example, that calls for $150 billion (USD) to be spent on upgrades in infrastructure which is fully open to foreign investment everything from water treatment to road construction, all forms of our infrastructure. Brazils Petrobras and its ambitious goals of helping turn Brazil into a major energy exporter with plans to invest a staggering $174 billion (USD) between now and 2013 are also well-known. Given Canadas excellent reputation for being a world leader in areas including oil and gas technology and service, Mohr-Bell says Brazil represents a ship set to sail on which Canadians would be amiss to not be aboard. Brazil doesnt have the capital for the economic expansion planned. We really are bottlenecked right now between a lack of investment capital and the capacity for growth. That (situation) represents just an enormous potential, which has not yet been realized. Canadas Export Development Corporation is the federal governments export credit agency designed to help Canadians respond to foreign opportunities through trade finance for Canadian companies and international companies using Canadian companies, as well as a whole line of risk mitigation services. Last year, Brazil rose to No. 2 on the list of countries at the focus of EDC spending the first time Brazil ranked ahead of China, India and Mexico. porate financing loan to Petrobras in support of a variety of Canadian exporters. The EDCs Jim McArdle travelled to Rio de Janeiro
Kathryn Engel / Wikimedia Commons
the country represents some of the most signifiits not for the faint of heart.
cant opportunities for Canadians in the world, but James Mohr-Bell heads up the Brazil-Canada Chamber of Commerce from his office in So Paulo and says for Canadian companies willing to step up to the challenge, there are few better climates of investment return in the world right now than those there for the taking in Brazil. What you find here are what I call generations of Canadian investment in Brazil, says Mohr-Bell, who recently spoke with Slick World in a lengthy dialogue about the opportunities and obstacles of doing business in Brazil. As far back as 1899, Brazils system of public utilities was made responsible by investors from Canada, and that company interest remains here today (Brookfield, once known as BrasCan). (Its) one of the strongest companies in Brazil and it is Canadian. Then we had a whole generation of mining interests from Canada come in through the 50s and 60s, which remain today, followed by a generation of telecommunications in the 90s, and then later a whole array of industries represented by Canadian investment. So, if you ask some of those long-established companies, they love Brazil. They describe the country as a very attractive foreign market, one of the best places to do business anywhere. But if you ask what I call the new companies, they say, Oh, its too hard, too complicated, too competitive, too restrictive. They havent done the research, they arent willing to make any long-term investment. They dont understand the marketplace here, or Brazil generally. They just see it as complicated and dont pursue the opportunities. Others operating in Brazil say business between the two countries can be easier than between prov-
In 2008, EDC provided a $500-million (USD) cor-
James Mohr-Bell, executive director of the Brazil-Canada Chamber of Commerce, urges the Canadian business community to not shy away from opportunities in Brazil, despite obstacles they initially might see.
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where Slick World caught up with him at an address to Canadian companies about Brazils highly-attractive market potential based not only on the reserves and development plans but also on the countrys commitment to Corporate Social Responsibility. Brazil is completely committed to CSR, and were seeing that now moving through the whole system here, right from extraction or exploration right down to the suppliers, says McArdle. He says Brazil has gotten the attention of the whole world with its determination to develop a new and unshakable reputation for responsibility and is, in part, promoting its oil and gas development plans as a means of reducing activity in the Amazon to displace economic dependency. From the countrys unparalleled expenditures on research and development, to disclosure and accountability, McArdle says Brazil handily meets even EDCs CSR requirements for loans, which are among the most strict in the world. CSR and ethics in general play a lead role in our spending decisions. Businesses everywhere are subjects of intense public scrutiny with everyone watching for the social and environ-
mental impact of all their transactions, explains McArdle. So that aspect is of equal consideration to us alongside pure economics. The significance of the Petrobras loan, says McArdle, speaks to both the excellent opportunities for Canadians in Brazil as well as a supportive Canadian-Brazil trade relationship designed in large part to help Brazil realize some of its social development goals. Were all looking beyond just the economic or monetary possibilities alone towards a consideration of the enormous needs Brazil has right now for social development health, education, infrastructure, etc. Our position is as Brazils GDP grows, the country can really address those needs properly. The best thing that can happen in Brazil is true development in a sustainable way to create the social structure they need here, and there are a lot of opportunities to achieve that, in part through the presence of Canadian companies here taking part not just in oil and gas but mining, minerals, telecommunications, agriculture. Brazil is in the fortunate position of not being dependent on any one sector for development. To put into perspective where Brazil
Jim McArdle (centre), senior vice-president, legal services and secretary with Canadas Export Development Corporation, meets with business leaders from the Canada-Brazil Chamber of Commerce in Rio de Janeiro.
Canada already has strong ties to Bra50

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Kathryn Engel
is at economically right now, MohrBells says one needs to understand the countrys economic history, juxtaposed with its aggressive plans for the future for reforms for the country of some 190 million people. (Canadians) need to realize, we came from a military state, and weve made some huge progress here. In even just the last 15 years or so, but we still have some key areas (in which) we need to make progress. Those include tax reform. Currently Brazils level of taxation is close to 37 per cent of it GDP, and it should be around 25 per cent. We need better labour legislation, which right now is still that written up in wartime, and we still need further political reforms. All of that would make foreign investment more of a smooth process. Even so, despite some of the limitations that have hindered Brazils sustained growth in its recent past, including inflation, currency restraints and even electrical shortages, the country can point to several economic bragging rights. Petrobras is considered one of the worlds most advanced and powerful energy companies with, for instance, a new research station being built in Rio de Janeiro to replace a current one, which boasts more PhDs than most other R&D facilities in the world. The country has also made enormous leaps and bounds in areas of renewable energy including ethanol and wind energy, and has among the largest and strongest agricultural sectors in the world. We have an agricultural sector unparalleled in its competition because it has the advantage of being low-cost and also, because of the size of Brazil, its agricultural base could triple in size without cutting down one Amazon tree, says Mohr-Bell. Brazil is the largest beef producer in the world, and has a very strong market in soybeans, poultry and many other agricultural commodities.
zil through a longstanding mining relationship, with 55 Canadian companies active in gold, metals and diamond mining in Brazil. Despite the potential, though, MohrBell says much work needs to be done to open the doors of Canadian investment in Brazil something his group has made a top priority. From oil and gas to renewable energy to food and agricultural processing, the list is long for opportunities for Canadians here but we have work to do to further that along. The two countries are still very distant, they still know very little about each other. There is a huge barrier and we are working on improving that understanding. The Brazil-Canadian Chamber has helped facilitate exchange trips with groups such as EDC, the Canadian Consulate General and Ministry of International Trade, and is lobbying for things such as free-trade agreements to, in part, move both countries beyond some awkward past history including old disputes over mad cow disease and airline discrepancies centred around Bombardier. Meanwhile, Mohr-Bell says Canadian private companies can also do better at seizing the opportunities before them. Private interests have to better connect their corporate vehicle to Brazils economy. They have to make more of an effort to do the research, get the help they need, meet the right people, find the right partners, understand the rules and regulations, step up. Thats where Canadian companies are failing right now. slickworldonline.com
Jeff McCoshen
Rio de Janeiro will undoubtedly see a flood of development over the next few years as preparations for the now-confirmed 2016 Olympic Games ramp up.
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Petrobras
Why its a name you need to know
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s other companies around the world were struggling to cope with one of the most poignant global economic recessions in history, one state-owned oil and gas company in Brazil was making news of its own that would turn out to be even more newsworthy than the great economic meltdown of the century. In the first six months of last year, Petrobras, Brazils government-managed oil and gas company went from being ranked independently at No. 37 of the worlds largest companies all the way up to No. 8. Petrobras market value soared from 95.9 billion to 164.8 billion USD during that time period, according to a survey carried out by Ernst & Young. When everyone else was retreating and receding, Petrobras did what the
history texts will surely recall as notable; it increased its spending forecast by more than 50 per cent and boldly released a plan to spend $174 billion USD before 2013 largely on exploration and development and dared the planet to hold it to its word. Its goal is to become among the top five integrated energy companies in the world by 2020. We are beginning a new age, Petrobras Marcelo de Freitas Guimares tells Slick World Magazine over an espresso in a boardroom in the companys 36th-floor headquarters in Rio de Janeiro. Its the message Brazilians are hearing everywhere these days, its a new age, its a new day. This is a new beginning for us in Brazil. That frontier spirit is based largely on what lies beneath the depths of the
Santos basin tourists gaze off towards on the beaches of So Paulo and Rio de Janeiro. Its sometimes called pre-salt, other times sub-salt, but one thing it is called with increasing consistency with every new find by almost any serious industry watcher is the future of Brazil. The oil lies under more than 2,000 metres of water and a further 5,000 metres under sand, rock and a shifting layer of salt. Petrobras is said to now have proven reserves of 14 billion barrels in the area. Oil from pre-salt fields Tupi, Iara, Guara and Parque das Baleias could have production of between 10.6 billion and 16 billion barrels. The 800-kilometre long stretch is now being hailed as at least parallel with
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Kathryn Engel
the upper echelons of the worlds largest oil-producing regions over the next 10 years, if not the most significant. The expanse is now the most frequent point of promise amongst leading industry watchers across the world, who say it is set to become one of the worlds major oil-producing regions over the course of the next decade. De Freitas Guimares, a top manager with Petrobras, says the drama that unfolded with the pre-salt discoveries was almost akin to a Brazilian World Cup soccer match for the 300,000 direct and contracted employees of Petrobras, as well as the residents of Brazil. When the pre-salt discoveries were first made, it was, ooooohhhhhh, huge sighs almost, almost too hard to believe, says de Freitas Guimares. It was, how would you say, it was wild, it was almost too much to take it. The whole world was talking about it, and people, even here at Petrobras, were almost afraid. They thought, well, it cant be produced, its too expensive, we dont have the technology to do something like that. That hasnt been done to that extent, anywhere of that depth. But then, the tests started proving pos-
itive. And positive, and positive again, with even better results than first expected. The results continue to pour in, and even just days before Slick Worlds second of two trips to Brazil, news of the latest discovery again exceeded expectations. Even the harshest initial critics who warned Brazil would never be able to attract the capital needed, or that the high costs presented insurmountable economic risks, have subsided as discovery after discovery continues to speak to the reality of the mammoth reserves of amongst the best quality oil, and gas, in the seas. Petrobras now says the play is economically viable at a little less than $45 per barrel. When we started producing the wells and we could see what was there and the quality and amount and we could all see that yes, we can produce this, we can grow, there was a new sense, people were talking now about Oh, there will be more work for us, and this is great for Brazil, this positions the company very well and everyone is very positive, everyone is very hopeful about what this will mean for our future, yes, very positive.
Most critics dont even believe Brazils new oil law, passed while Slick World was in Brazil, which boosts the governments stake in Petrobras, can deter the inevitable foreign investment in the pre-salt development. Thats based largely on the many distinctions between Brazil and other state-producing jurisdictions, including Venezuela. Back in Rio, the phones and emails of the managers dealing with the colossal task of handling the operations post pre-salt are hitting a feverish pitch. Weve been preparing for this more and more, for new development by growing the company, says de Freitas Guimares. New people are coming to work here, we have contractors already, and, of course, were
Marcelo de Freitas Guimares is a lead engineer with Petrobras, whos assets were recently listed at $133.5 billion USD.
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The recent pre-salt discoveries created quite a buzz among Petrobras employees and residents of Brazil.
Kathryn Engel / Wikimedia Commons
dealing with more and more interest a lot. News of the pre-salt, new refineries, gas, transportation, L&G projects, ships, everything is being talked about a lot of companies coming to talk with us, show us what they can do to help us, making efforts to stay with us and grow with us. Pre-salt presents a big opportunity in all areas; its important for the future of the company, the future of the country. It creates a lot of jobs. As for the controversial 33 per cent government/Petrobras stake in the area, de Freitas Guimares says its a complicated dialogue that gets caught up in the rhetoric and ill-effects of neighbouring countries. There is politics, of course, but generally it is a good decision for Brazil. It preserves our quality of research and development and preserves the revenue that will stay here and go to the people, vocations, transportation and education and health. It needs to stay here in Brazil, this is needed, we know this.
And he says after Brazils long and well-known toiling towards economic reforms, the country collectively is eager to let the world know it is finally at the point of arrival, led by a company that is about to be taken seriously on an international stage even beyond oil and gas. This has been challenging for the company, as well as Brazil as a nation. We (Petrobras) began 50 years ago as a small company in Brazil, and we began to grow and make some discoveries but now, with the extent of our growth and discoveries, this is now a good opportunity for foreigners to finally really see Brazil, through Petrobras if you understand; take Brazil seriously. When they think of Brazil now, its not only soccer. They think Oh, Petrobras, its capable of very high levels of oil and gas, its Petrobras, this major powerful company, so they understand, Ah, Brazil can do business on a world (stage). This is good for Brazil in many ways. See related story, Page 58
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PROMOTION
IPAC SERVICES
IPAC Services has a 20-year history of strength, ingenuity and leadership in handling some of the most comprehensive projects in the history of oil and gas in Western Canada. When Canadas most growthminded major and junior producing companies set out to discover new frontiers of energy development, they turn to IPAC, a privately-held provider of construction, maintenance and logistics services. The IPAC stamp of excellence in design has pioneered new advances in efficiency across the Western Canadian energy landscape, where the company has introduced new standards in large-scale facility construction that are helping set a new bar in cost and time savings in the domestic arena. At the same time, IPAC has moved forward and looked beyond in a new chapter of establishing integral relationships in the international market. It is through its solid partnerships and long-term relationships that IPAC is now applying its 20 years of experience and outstanding reputation for innovative solutions to some of the industrys most challenging demands in important emerging foreign markets. With its full integration of services, IPAC answers to the largest industry challenges with the most streamlined response, providing extensive construction packages including everything from fabrication, painting, transportation and field installation with supporting electrical and instrumentation.
In its pipeline division, IPAC has become synonymous with dependability and reliability, and with proven results in supportive intelligent systems of abrasive blasting and protective coatings built to address the most demanding terrains and conditions on the planet, IPAC is poised and ready to answer to the enormous needs of international industry development. In its new state-of-the-art 30,000 square-foot facilities, IPAC has expanded its fabrication line and is certified to handle sweet and sour service piping and pressure vessel construction and alteration, as well as any extent of construction, repairs and refurbishment. IPAC is also an industrial-equipment dealer with access to a whole network of equipment associated with some of the largest and most advanced oil and gas projects in the world and refurbished as required for specific international requirements. IPAC has already transcended international borders and has completed projects in Central American and Europe. With a special interest in South America, IPAC has already built relationships in Brazil, where some of the most promising developments are set to take place. People are more important than numbers at IPAC, and based on that philosophy, the company has moved ahead of the pack in its aggressive commitment to the kind of quality assurance and control, woven right into the IPAC culture. When IPAC is on the job, wherever the job is, people, and property are protected.
IPAC Services Corporation is a leading provider of construction, maintenance and logistical services. Our valuable experience and knowledge is gained from servicing a broad base of industry sectors. IPACs expertise includes the oil & gas, petro chemical, utilities, wood products, pulp and paper, forestry, power generation and mining sectors. Primarily serving the geographic region of Western Canada, IPAC continues to explore North American and international opportunities.
PROMOTION
IP AC
SERVICES CORP.
20
YEARS IN BUSINESS
GRANDE PRAIRIE 780-532-7350 CALGARY 403-228-1919 ARIDRIE 403-948-1155 FORT ST JOHN 250-263-9330 FORT NELSON 250-774-4770
Conversations
Charles Labrunie, Petrobras
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t is said to represent amongst the most promising opportunities for foreign oil and gas companies, including those from Western Canada. And while Brazils Petrobras is known only as a state-owned company and conjures up images of Venezuela or Bolivia, in fact, the company has been operated independent of the state since 1997. And unlike both its state-owned counterparts and the elite private oil and gas companies in its world-class rankings, Petrobras stands alone in what many are calling its unique and perfectly-balanced mix of profitability in recessionary conditions, social spending, and environmentally-forward initiatives. With 300,000 employees, one of the largest research and development budgets on the planet, (See related story, Page 50) and now poised to handle some of the deepest off-shore finds in existence with both its own and foreign leading-edge technology, the worlds eyes are squarely on what this Brazilian entity can and will do in the imminent future. Slick World editor Kathryn Engel was lucky enough to garner some face time with one of the companys key decision-makers, Charles Labrunie, who heads up the Petrobras logistics through its Transpetro arm.
ke: tell
me, first, about operations and
transpetro in the structure of petrobras. CL: Brazil has a constitutional change in 1988. Before that time, Petrobras maintained a monopoly, and when that was broke, the law established Petrobras should separate all logistics, so Transpetro was created to operate all pipelines 400,000 kilometres of pipeline or so, terminals, facilities, ship fleets, shipyards, on and on.
the development of
ke: ive read and heard a great deal lately brazil becoming the next superpower, or certainly the next superpower of the south. from your experience in brazil and in petrobras, what is your thought on that dialogue? CL: (Laughs gently, pauses thoughtfully.) Oh, I dont think the people of Brazil are thinking of this, the population is not thinking of this, no, I would say this is not our main
about
ke: everyone is talking around the world about the $174 billion usd. tell me about the decision surrounding the increase in projected spending in conjunction with the pre-salt, and why it is so important and urgent now. CL: Most of that, over half, will go towards exploration and production, and yes, in the pre-salt, around 55 per cent. Over 30 some per cent will go to refineries, transportation and distribution. What we need to do in Brazil is we need to bring a lot of the poor people up to a new living (standard), and we need to give them development. As you know, we have a very large amount of poverty, very poor. We feel the profits we can get from development from this resource this will create jobs, this will create many new industries, construction, roads, schools, water, sewer, all the trains, navigation many, many aspects that need to be developed further here. There are many important developments that need to come from our resource, and we need to do that now, for the development of Brazil. ke: there
has been a great deal of dia-
logue surrounding that, yes, the potential for this pre-salt in the history of zils economic development.
bra-
ke: goal? CL: Vocation, I think is the English word I think of this is not our main vocation. We have so many things to do to improve, to bring up the living, the standards all the new resources will not be about, or enough, to create a new superpower in the world as some say. That is not my own thought. Maybe, yes, maybe it will increase our leadership in South America, Latin America, maybe, but we think, and I think we need to know how to develop not only for us but also our neighbours. One point we all feel, myself included, this development will bring a lot of advantages not only to us but the world; more education to rebuild things like Amazon cutting there will be a great reduction in cutting trees in the Amazon because there will be less need for that money from that resource because of this oil and gas development. This is good for the whole world, its important. People have needed to explore in those areas because the money has been needed but if our oil and gas reserve is well managed, we can reduce that for our benefit and (that of) the world. ke: there
has also been so much discussion over whether or not this is all feasible, how much of it
Jeff McCoshen
CL: Yes, yes. The opportunity of the pre-salt. To have, to realize our history of Brazil, this is where we are, this is very important to us. The main problem is, of course, how to manage our resource in the proper way to guarantee most of it will help our country develop, bring poor people to better conditions. More school education, better conditions. You can see, I know you can see that need.
petrobras can handle,
how much foreign investment is needed?
CL: You saw the amount of investment we need (semi-private presentation at Rio Pipeline seminar), I have absolutely no doubt we need foreign investment to help develop this resource for the benefit of all Brazilians. You saw the magnitude of this resource. It will be impossible to develop this resource
Brazils agricultural industry also represents what officials call a world of opportunities for Canadian investment in the growth of the Brazilian economy. Here, a street vendor sells his wares in downtown Rio de Janeiro.
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ABOVE: Random weekend afternoon game gatherings where locals can be overheard discussing the popular economic reforms being put in place to augment living conditions are a common sight across Brazils urban areas. RIGHT: Petrobras says oil and gas development will lessen use of the fragile Amazon. Here, a child sells nuts harvested from the region. FAR RIGHT: A Cariocan, a native of Rio de Janeiro, feeds the birds of the Copacabana.
alone. We are interested in partnerships people who come in here in partnerships or establish here and do business in a way that establishes a long-term relationship with countries coming here. ke: in canada,
tries. as you know, we are not
unfamiliar with state-controlled indus-
that has been a part of our history
and something business understands and respects to some extent, especially in certain situations where that support for the population is essential. thoughts on general?
what
are your
canadian
investment, in
CL: I can say about my experience, it 60
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was always, in all my years, easier to partner with Canadians. We in Brazil and in Petrobras always feel Canadians understand looking at both sides of an interest, not only their side. This is the truth of my experience. Canadians you understand partnerships, the principals of good partnerships, both sides of that equation, yours is not a selfish business model. And you understand what it is like, this type of situation because you have had this experience you have had other countries, foreign investors coming into your country, wanting to come in and do business, and you have struggled
to keep the (profits) of those resources foreigners, including the U.S., have developed in your country. You understand this better, our importance of working together with foreigners in a situation that is still good for Brazilians, in good relationships with the countries investing here. You, as Canadians, have a particular sensitivity to this. ke: yes, we do have a lot of dialogue americans, in particular, coming in,. youre right of course. where i live, oil is piped down to chicago right past us and sold back to us as gas. CL: Yes, exactly this experience is not unlike what we are facing now. We believe Canadian businesses will understand some of the concern, the need for Brazilians to have a benefit of our development.
about
ke: canada now has six trade offices here in brazil. does that, in your opinion,
speak to our relationship between the two countries as trading partners and opportunities in the future?
CL: That shows, yes, it is a big sign of willingness on both sides, to do business. ke: yet,
we hear stories of
canadians
frustrated because they havent been able to get themselves in the door here.
Jeff McCoshen
CL: I dont have that perception, I have a complete opposite perception. Considering my own experience, it was always easier to do business with Canadian firms and we have strong experiences long-term contracts with Enbridge who came here and helped us develop our pipeline and we have a very good long-term relationship with Enbridge. Our automation systems for our pipeline systems are provided by Telvent here 12 years of strong partnership with this company and it has been a very important relationship. I have many other examples of strong Canadians here and we have never had anything but an excellent relationship with the Canadians working with us, so I would say my experience is that there are lots of opportunities.
ke: we have intense competition back in canada right now. describe the situation here. CL: Here, we are trying to make it more competitive! Thats a main goal, to make our local business environment more competitive, that is why we need much more foreign presence here. I will tell you in shipping, a story for you. We used to be the worlds second biggest producer of ships in the past and we have lost that. This is a huge example for my department right now. We built a new shipyard in Recife, where you were, and were (Petrobras/ Transpetro) buying 10 new tankards from this shipyard. We understand the concept that, at first, this can be more expensive and not as competitive as it could be, we understand this, but we want those to come down to international price as quickly as possible to be competitive. So sometimes we have internal problems competing we are big producers, as you know, of steel. But sometimes, if we dont find a steel price here that we need to build the ships in a competitive way, we say, Okay, that local shipyard needs to be competitive. We are not going to kill our shipyards to help the steel manufacturers here in Brazil they need to be competitive to sell us their steel to make our shipyards competitive on an international market. We, of course, want to give priority to steel makers here in Brazil but that shipyard is very important to Brazil so it needs to be competitive. So we will make them more competitive, or take the more competitive price. Do you understand how important that is? We have many, many workers here at this new shipyard, and a huge possibility to compete internationally. Many Brazilians are getting their first real work there and we have this chance to become a leader again in shipbuilding. Because we are demanding competition, that shipyard now which started with just our (Petrobras) orders now has three new international orders. So the same concept will be applied to refining so, I have a contractor, a pet61
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Its a great story, its a great moment for Brazil, and we hope we will use this opportunity in the best way for this country to meet the needs of our poor population, to make a better life for the people here.
ro manufacturer, a pipe manufacturer anything if you want to establish here as a manufacturer you need to be competitive in a global market, both our local companies and international companies here. So we need to start thinking of that. This is why there are opportunities for Canadians. ke: imminently? CL: Yes, I think the learning curve should be very quick. After a certain period, for example, we want ships built here in the same condition as other areas in the world, and every other area will be the same subject. Any new company can come in and establish a deal with Petrobras, or with Brazilian partners petrochemicals, agribusiness, many areas a lot of areas people can do partnerships always helping Brazil create jobs, very many poor people that need to come to market establish competitive companies that can play in the global market. ke: youve
years with been in the business for many
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pre-salt brazil. CL: Weve had a difficult time in the past we were a very small producer
petrobras. tell me what the finds meant to petrobras and
for very many years. In the past, as you know, we had to buy most of our oil. Then we came to a situation now where we are not relying on other countries, after very high exploration and production. Now were producing enough for our internal markets we purchase some light crude but we make up for that with other exports. This independence has just been in the past three years. So then we find this pre-salt, and we were not expecting that at all independence was enough for us, supplying our own needs, and then we discovered this enormous supply, some two years ago, but really most of it just in the last year and were still discovering and being surprised by the extent of it. So now, yes, were redoing our strategy what we are going to do with all this oil and gas we were not expecting. And yes, now is the time for foreigners, for Canadians to see what we have and how they can help, play a part in that. And oil and gas is not all of what our GDP is about. There are very many other opportunities we havent even talked about. Agriculture is a huge area of opportunity for us and partnerships with Canada.
We have a lot of water 20 per cent of the worlds fresh water supply and a lot of land now used mostly for cattle which is available too for crop development. And our cattle industry did you know we have the same population of cattle as people? ke: really some 190 million cows in brazil? CL: Yes. (Laughs.) And we have a very large area for crop development as well, so we dont need to cut more trees for agricultural development. We have a lot of area to grow crops, and there are other agricultural things we want to develop with strong opportunities for Canadians, in particular. We are doing much development in the area of biofuels, another strong opportunity I feel we can boost through partnerships with Canadians. ke: its a great story for brazil. CL: Yes, its a great story, its a great moment for Brazil, and we hope we will use this opportunity in the best way for this country to meet the needs of our poor population, to make a better life for the people here. slickworldonline.com
Getting Down to Business in Brazil

Canadians who have set up shop already say where theres a will, theres a way
itting across from one of his Petrobras contacts in Rio de Janeiro, deep in a Portuguese technical discussion about one of his companys products at a well station up-state flanked on either side by his two Brazilian engineer/representatives Jack Archer looks as comfortable as if he was in his companys Calgary boardroom. Thats in large part because he is at least as familiar with the scenario,
quite probably even more so than one might think. Archer, the South American director for Calgarys Global Thermoelectric, has spent almost his entire career collecting vivid and varied experiences across Africa, Europe and South America. First as an engineer with Dowell Schlumberger and later as a CIDA representative before selling integrated remote power units for Global, his many career memories include his-
torical monuments such as working in the Libyan jungle the day of, and weeks following, the Muammar Gaddafi revolution, and being in Bolivia on the day Ch Guvaro was captured and killed. Fluent in Spanish and more familiar in Portuguese than he lets on, Archer represents amongst the most prominent Canadian presence in South America and, especially, the emerging market of Brazil.
Kathryn Engel
Jack Archer of Calgarys Global Thermoelectric strategizes with the companys Brazilian agents, Monique Valente and Luiz Fernando 63 slick world Souza in Rio de Janeiro.
About 75 per cent of Globals business is international, and 50 per cent of its business is outside of both Canada and the U.S., and South America, including Brazil increasingly, is a really important part of that mix for us, says Archer. Being well-positioned in South America just as the lucrative Brazilian market is presenting what Archer calls real and exciting opportunities for Canadians, he says, gives the company an inherent advantage.
This is a place for smart Canadians to explore. Canada is a leader in gas. Alberta is one of the largest exporters of gas anywhere. Brazil is now, with the pre-salt, getting into the market in a major way and is no longer depending as much on gas from elsewhere. The plans for development of this reserve here are absolutely massive and the opportunities are ripe. Archer says Global really started taking hold in Brazil in 2000, when he hired a local engineer, Monique Va-
lente, to represent the product. He says she was responsible for making huge inroads into the all-important task of building integral relationships with Petrobras. She was really able to technically convince them our system was more economical and dependable than anything they had tried in the past and they have been extremely happy with our systems ever since and we are always increasing our work with them. All of Globals Brazil work is a result of the work the company does with Petrobras or one of its subsiduaries, as is almost exclusively the case for any foreign presence in the Brazilian oilpatch. And with a promise to inject $174 billion USD into Brazilian oil and gas development before 2013, Canadians facing an industry slump back home should consider looking to Brazil, says Jonathon Saint of NetSafety, another Calgary company in the country.
ABOVE: Construction projects are common throughout Brazil as Petrobras continues to invest heavily. LEFT: At the CTDUT research centre in Brazil, a Canadian checks out work being done on a high-pressure hot-taping research project for the pipeline industry.
Kathryn Engel / www.gdksa.com.br
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ABOVE: The demand for SMART Technologies whiteboard has soared in Brazil as the country continues to open up to new technology. BELOW: Horcio Rodrigues represents Calgarys Net Safety in Rio de Janeiro.
Jeff McCoshen
Net Safety has its fire detection line of products in almost every country in South America and has had a presence in the Brazilian market for the last four years, also through a local engineer/rep. Saint says Brazil now represents the most exciting and potentially lucrative jurisdiction and is a major point of focus. The entire South American region is important to us, but Brazil alone is just huge, huge potential, says Saint. The opportunities are well-known and just tremendous. Net Safetys Rio de Janeiro representative, Horcio Rodrigues, has introduced the product to Petrobras in a variety of applica-
tions from batteries, well stations, refineries and platforms and has even helped refine the product to meet the needs of the Brazilian oil giant and capture that market edge. We worked with them (Petrobras) very closely to make sure we are providing them a product very specific to their advanced needs and, in return, theyve really eagerly responded to the product line. Claudia Scheiner of So Paulo has been the exclusive distributor for Calgarys SMART Technologies makers of mainly computer whiteboards across Brazil, since 2002, and she has been selling the product for SMART Technologies since the early 1990s. In the last couple of years, Scheiner says the demands for the software systems have skyrocketed as Brazils market opened fully, and she now has 90,000 systems of the Calgary product across Brazil. The product is used in schools, corporate offices, government, everywhere, and Brazil has really responded to it because it is a very effective solution that is extremely easy to use and is backed by the most solid warranty and product support system available, Scheiner says from her busy So Paulo corporate headquarters. Plus, Brazil is very aggressive right now getting everything up to speed in many areas, including education,
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Michael Okun, vice-president of the international division of NHC, has been pounding the pavement in Rio de Janeiro trying to increase the companys presence there.
The opportunities just opening up here are just enormous. Brazil is going to be one of the largest markets in the world very soon, right alongside China, the U.S. and India. I dont think people realize how fast Brazil is stepping up and how much faster that is taking place than everyone first believed. ~ Gerald Herman
Filtermaster distributor
Kathryn Engel
and all of its corporate systems, and this product is applicable to that. The government is investing a lot of money right now in things like educational upgrades, upgrades in every area, infrastructure, everything. Scheiner says the growth in the popularity of the product is reflective of the enormous opportunities across the, well, board, in Brazil, and that is only sure to increase exponentially with the development of the new pre-salt reserves. Our country is growing so fast, youd have to be right here all the time to see the growth as it unfolds. Its on everyones mind and it is happening so quickly. There are so many opportunities right now in every sector. Michael Okun is vice-president of the international division of NHC, a hydrotechnical engineering company which is headquartered in Edmonton with satellite offices in Vancouver, Seattle, Sacramento, Pasadena and Lake Tahoe. Okun says while the company has had a strong international presence since 1976, predominantly in Asia, he has had his eye on the Brazilian potential for the last four years and has stepped up his efforts dramatically in the last year or so. Weve worked on pipeline and river navigation projects here already, so we have a presence here, but we are really trying to build that up with a more significant base here in Brazil, says Okun, who met up with Slick World at the recent Rio Pipeline exhibition, which works in conjunction with Calgarys biennial pipeline show. Okun says he has been pounding the pavement in Rio trying to establish the needed relationships in order to cash in on some of the new projects coming on line as a result of the well-known Petrobras budget increase. Brazil is definitely the USA of South America, so if you want to work here you have to start learning the 67
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FAST FACTS
Official Name: Federal Republic of Brazil Capital City: Brasilia System of Government: Brazil is a multi-party political system that holds democratic elections for president, senators, representatives, state governors, mayors and city councils. It is interesting to note that Brazil leads the world in online electronic voting with over 100 million voters (2004). Land Mass: Brazil is the largest country in South America at 3,286,470 square miles, occupying almost 50 per cent of the South American continent. It borders every South American country except Chile and Ecuador. About 58 per cent of Brazil is covered with forests, including the worlds largest rainforest in the Amazon River Basin. Economy: Brazilian economists predict the countrys gross domestic product (GDP) will grow foor to six per cent in 2010, while inflation is expected to be reined in at about four per cent. Economists also forecast that the country will account for 29 per cent of Latin America regional oil demand by 2010, while providing 21.5 per cent of supply. Language: Although it is already being called the superpower of the south Brazil is the only South American country that consistently faces the challenge of being the only Portuguese-speaking country in the hemisphere. And while outsiders believe or assume Brazilians can largely manoeuvre in Spanish, most Brazilians are more likely to understand English than Spanish as their second language.
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language and culture and how they do business. So the only way you can come in is if either if you have something extremely unique that they dont have, and even then they will find a way so that you will need to transfer that into the system somehow, or if you just build up some great connections. In any case, Okun says whatever effort he is making in Rio now will undoubtedly pay off enormously in the long run. The feeling here is like USA or Canada was in the 50s or 60s, except they have modern technology here. Everything here is done in very advanced systems and in a climate of high corporate responsibility, environmental considerations, all of that, very modern. But in the sense of investment in exploration and production, and what is being developed in infrastructure, what is being invested in is just enormous, much bigger than at home because they are a lot further behind in infrastructure developments. The opportunities really are extraordinary. We get our work where people are building new infrastructure or refurbishing new infrastructure or need help managing it so, theres 190 million people here, as much or more than the rest of South America put together. The only other place that even comes close to this feeling of development in investing is Chile, but its just so much smaller. Brazil is the centre of the universe in that respect. Grant Jameson, president of Entec, a Calgary company specializing in HDD services, recently made his first trip to Brazil because the Petrobras $174 billion USD plan for exploration and development caught his eye. Brazil is such a developing market, says Jameson, who made the trip from Calgary to Rio to explore the opportunities. Its one of the few places left in the world right now (where) youve seen capital investment increase ... They have long-term plans for development. Theyre not worried or concerned about near-term fluctuations in commodity pricing and energy pricing. They have a more long-term vision of
Kathryn Engel
the energy industry and that is where we all want to be. Jameson says the current situation in Alberta of bidding wars that have escalated to the point of below-cost bids being submitted, the royalty structure which has seen more companies seek work in places such as Saskatchewan and B.C., and a highly competitive environment has him gravitating to where opportunities are more attractive. In Alberta, you just have to start thinking outside the box. You know, the recession hit in Alberta hard, and royalties topped it off. This place is attracting capital and youre seeing other places everywhere else, even in our mutual home turf back in Canada, where the opposite is happening capital budgets are just disappearing. One of the largest energy companies in Canada, EnCana, just stripped 50 per cent of its capital budget away from its Canadian operations down into plays in the U.S., says Jameson. So when you see capital leaving, you know that the metrics just arent there there are better opportunities for them and theyll go find them and there will be a ripple effect on all service companies in Western Canada when those companies start to leave. You have to go after it. Petrobras is our EnCana, and what they are doing here is the opposite of what EnCana is doing at home. You have to follow capital, you need to look for new applications for technology and get yourself ahead of the curve. I think Brazil presents a world of opportunity for Canadians. IPAC is a fully-integrated construction, maintenance and procurement company in northern Alberta that has handled some of the largest projects in Canada, and also is growing tired of waiting around for things to improve in Alberta. IPAC president Ron Ward is eager to explore what the ground level of Brazils development has to offer. When you look at what is happening in Alberta, with the bidding wars and the overall stalling of our industry, its
When you look at what is happening in Alberta, with the bidding wars and the overall stalling of our industry, its worth at least exploring the potential of a market ripe with really solid opportunities just to see if those make sense for us.
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worth at least exploring the potential of a market ripe with really solid opportunities just to see if those make sense for us. At least we know were not just standing around waiting for something to give around here. Miguel Leach works for Vancouvers BGC Engineering out of his Argentina base, where the Canadian engineering firm has had a presence since 2001. South American is our most important destination as a company, outside of our very strong core base of work in Canada, says Leach, who met Slick World in Rio de Janeiro at the Rio Pipeline conference.
The Andean geography has provided us with ideal situations companies have faced many challenges having their pipelines, water lines and slurry lines traverse through some very tough terrain and (that) provides us with very challenging and ongoing opportunities, says Leach. It was that South American presence, in Argentina and Chile specifically, that allowed the Canadian company to better withstand the full brunt of the recession. This was actually our busiest year ever, and we were afraid wed be victims of this huge crisis that has affected ev-
eryone. But, in large part because of the mix of business we have in South America a lot of our business is related to copper and gold mining which has kept upbeat here throughout the crisis we have many ongoing projects with clients portfolios that need to continue. For the last few years, BGCs representatives, including Leach, have been actively attempting to build a presence in Brazil a market he concedes that has so far been a tough nut to crack. Because of the Petrobras budget for development, Leach says BGC is even more determined to be persistent in
... they wont be able to handle this alone, they are going to need a lot of help. You have to be in the right place at the right time. ~ Miguel Leach
BGC Engineering, Vancouver
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Brazil is such a developing market, its one of the few places left in the world right now (where) youve seen capital investment increase ... They have long-term plans for development. Theyre not worried or concerned about near-term fluctuations in commodity pricing and energy pricing. ~ Grant Jameson
President of Calgarys Entec
Kathryn Engel
its efforts to tap into the local market. Just think of point one per cent of that $174 billion spent on consulting weve obviously got a thirst for that kind of development. No other country is going to be that aggressive, and if you consider the announcements just over the last month or so with the discoveries theyve made, I really believe, as do they, they wont be able to handle this alone, they are going to need a lot of help. You have to be in the right place at the right time. Local people need to realize that as well they wont be able to handle it alone, they need the help, and we want to be right here when they realize that. Gerald Herman is the exclusive Filtermaster distributor for the Canadian company in South America and was celebrating his very first product sold to Petrobras the day Slick World caught up to him in Rio de Janeiro. It was a very small order, one product, it doesnt even pay for bus fare, laughs Herman. And weve been knocking
on doors for three years here, but its a start. The opportunities just opening up here are just enormous. Brazil is going to be one of the largest markets in the world very soon, right alongside China, the U.S. and India. I dont think people realize how fast Brazil is stepping up and how much faster that is taking place than everyone first believed. Herman says alongside the raw potential of the on- and off-shore reserves in Brazil, the country represents one of the most attractive economic, social, political climates in the world in which to do business. The Brazilian government is very forward, very aggressive, very openminded and very modern. Petrobras is state-owned, but its profit-orientated, and open, very open, to investment. Brazil is not at all like other countries in South America with state-controlled reserves. Its just a very good place to do business and one we are very much interested in pursuing. Canadian companies who have been
making every effort getting into Brazil say they will continue to step up their efforts in order to be on the ground floor of what they believe will be a historic moment of growth for Brazil. Brazil, as a country within the hemisphere in South America, will grow to become the superpower of the south, says Leach. It is getting a lot of attention in the U.S. and Canada and, frankly, the people of the north will not allow this monster to grow as big as it wants. They will keep a check on it and they will be working with them as allies and partners right alongside that development. There are a lot of synergies Brazil can take advantage of, from the Northern Hemisphere because of that experience in oil and gas. Were probably 30 years ahead in your Canadian resource play and we need to use that position to gain access to the possibilities. slickworldonline.com
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Wearing the Flag

kathryn engel
Petrobras officials have said the Canadian model of business is stellar. Reps across Brazil say theyve gained their most mileage from putting forth the Canadian angle in sales. Slick World explores why the Canadian flag might just be the best point of sale, and may well provide access to the most potentiallylucrative market in the world.
iguel Leach was born and raised in Argentina and now works for Vancouvers BGC Engineering Inc. out of his Argentinian base, where the Canadian engineering firm has had a presence since 2001. After working in the U.S. in the oil and gas industry for a variety of several large American companies, Leach encountered the Vancouver BGC. Ten years ago I jumped at the chance to work with a Canadian firm, says Leach, who adds Canadians have such a strong reputation for good business right across South America they ought to capitalize on more local opportunities as a result. Canadians in business here are known as the Swiss of the Americas. The way Canadians do business and go about business is just the right way. Its the highest road. Ive worked with a lot of American companies and I can tell you the difference right across the industry is night and day. His work for a Canadian firm out of his home country of Argentina has proven to be an asset in his dealings with companies across South America. South Americans know the level of proficiencies and professionalism they are going to get when they work with Canadians. Theres a unique optic Canadians use to focus on business, which is not through statistics and numbers and ratios but doing the right thing, the proper thing and doing it right the first time and I can tell you that buys a lot of confidence. That is an excellent reputation. Brazilian Claudia Scheiner has been pitching her Canadian product for over a decade and says the fact that it is made in Calgary alone gets her in the door in more cases than not. As soon as I tell people it was made in Canada, they are more interested, sim72
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Applying the
best of Canadian Innovation to meaningful Economic

across
South America.
Development
Slick South America is a joint partnership between Albertas Slick International and SE3, a group of South American engineering industry representatives headquartered in Belo Horizonte, Brazil and serving all of South and Central America. Slick South America is based on a solid mutual philosophy that has, at its heart, a commitment to measures designed to increase jurisdictional GDPs in order to achieve sustained growth for the benefit of all South Americans in an environmentally-forward manner. Slick South America targets emerging markets wherein aggressive measures have been put in place towards economic growth for local social development, and where Canadian leading technology, ethical service provision and excellence in product and project development is welcomed and invited to meet the goals of the task at hand. Through long-term relationships with amongst the most resourceful South American companies, research and development organizations and jurisdictions seeking less reliance on the Amazon and other sacred ecosystems while focusing on the most promising avenues of growth, Slick South America positions the best of Canadian industry in the heart of the most exciting and rewarding emerging marketplace on the planet. Slick South America represents companies that dont just want to work in South America, want to effect change through local partnerships, a local lasting presence, and a contribution to development agencies alongside their own direct economic stimulus efforts. Make a difference. Be a part of applying the proud Canadian record of unparalled advances in CSR and excellence in product design and service to high-level needed infrastructure and social development projects in South America. Slick South America. Getting you to work where your work is needed.
I N T E R N A T I O N A L
w w w. S L I C K i n t e r n a t i o n a l . c o m Grande Prairie | Calgary | Vancouver | Regina Dallas | Belo Horizonte | Montevideo
ply because here in Brazil, Canadians and Canadian products have an excellent reputation, says Scheiner. I really think products like the Blackberry that absolutely everyone has here and everyone just thinks its the smartest technology ever made, that has really helped my product because people associate high technology with Canada now. Horcio Rodrigues main competition for his Calgary product comes from Germany and the U.S. Like Scheiner, he says in his experience, the fact that it was made in Canada made the difference in getting the sale or not and, as a result, he positions his product as Canadian immediately. Whoever Im dealing with in engineering systems, Canadians are known to be associated with very advanced systems here in Brazil, says Rodrigues. In oil and gas, Canadians are known to have come from a more advanced industry with more modern systems and solutions. People see Canadians here as very hard-working, very good at what they do. When you talk to people about your Canadian product or even your Canadian company you represent, they see Canadians as always working very hard with the company to improve the
systems, and also to keep a very strong relationship. In his case, Rodrigues says even though his product comes from greater distances than some of what is available and therefore is often at a higher price point, it is still chosen, in part, he says, because of that Canadian stamp of excellence. People take your products seriously if they know they are made in Canada. They know they are going to work. Jack Archer, who has spent a lifetime in oil and gas in South America, says he has always had an edge for being a Canadian. Canadians are, generally speaking, seen and, and they are, more acceptable they are keen to speak the language and appreciate and respect local culture, many are used to the concept of speaking more than one, says Archer, who is married to an Argentinian and speaks both Spanish and Portuguese fluently. I also have people saying Canadians dont have that superior thought (that) were the best in the world, even in cases where we are the best at what we do or have the best products. People here really like that more humble sense. I know theyve been really open to my-
self and other countries for all the years Ive worked here. Scheiner says the great misfortune in Brazil for Canadians is the fact that they are largely not capitalizing on the opportunities their great reputation allows for. Its funny almost to me, how bad Canadians are at marketing themselves, laughs Scheiner. Here in Brazil, other countries do that very well, foreigners included. The Americans make so much noise compared to the Canadians. I feel very strongly Canadians should look for more opportunities here because Brazil is so open to them, but they dont give any importance to solid business development and commitment to things like being here with a plan for brand management here in Brazil. If you want to be successful in Brazil, you have to really develop your brand here through some long-term relationships that can help you do that. You have to invest in relationships that will both handle your business here, help you have a presence here, and manage and protect your brand here. slickworldonline.com
As soon as I tell people it was made in Canada, they are more interested, simply because here in Brazil, Canadians and Canadian products have an excellent reputation. ~ Claudia Scheiner
SMART Technologies
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The
Good The Bad The Ugly

The gamblers of Western Canadas oil and gas industry see light ahead
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t hasnt been an easy year in Western Canada. The oil and gas industry has faced challenge after challenge: shifting royalty regimes, plummeting natural gas prices, and the recessions hefty appetite for gobbling up company cash flows. However, the industry, when you get down to it, is a massive conglomerate of gamblers. True, they are gamblers backed up by experience, cash and teams of geologists, but there is never a guarantee of good times. Now, with many predicting the worst is over, hope is starting to spring up again. Royalty incentives, slowly rising gas prices, and the recessions hesitant demise are all pointing to more promising times. First, to get the brutal truths out of the way. Investment is down $16 billion this year in Western Canada at $34 billion compared to $50 billion in 2008 according to the Canadian Association of Petroleum Producers (CAPP). Gas industry profits are forecast to be down 60 per cent from where they were in 2008, says a new report by the Conference Board of Canada. Gas prices have been abysmal, sinking from last years record highs of $13 US per British Thermal Unit (btm) to less than $2 at the beginning of September. In 2008 there were 16,800 active wells in Western Canada, according to the Canadian Association of Oilwell Drilling Contractors (CAODC). Their projections for 2009 are just over half that: 8,787 wells. I would say its been a very, very tough year, says Laura Lau, senior portfolio manager for Sentry Select Capital Inc.
Its been a big roller-coaster as well. Simply put, the industry has gone through probably one of the more severe hollows that we have seen in Western Canada, says Peter Howard, vice-president of research for the Canadian Energy Research Institute (CERI). With the year starting out deep in the financial collapse of the stock market, the initial dramatic drop of the prices of both crude oil and natural gas hit hard. It was a pretty devastating scenario, says Howard. All in all, its been a tough ride for the oil and gas I industry in 2009. However, cautious voices of hope are speaking out. Its a world of ups and downs and the downs cant last forever.
Alberta on the mend

Alberta, the former golden province, has taken a beating this year. The troubles began when the provincial government raised the rates of some royalties the cut of the proceeds taken from oil and gas to fill provincial accounts substantially in late 2007, confidently announcing its New Royalty Framework as the economy boomed around them. A policy of lower royalties to maintain a minimum level of investment is no longer needed to attract investment to Alberta, read the New Royalty Framework report explaining the changes. It may have been a misstep: The move created a lot of anger in the industry and an almost instant slowdown in operations.
Without exaggerating, overnight it killed exploration, says Steve Kapusta, president and CEO of Canext Energy, a junior exploration company operating in northern Alberta. Conventional exploration in Alberta died October 2007. There were 376 rigs drilling in 2006. In 2007, and that number fell to 266. Companies that were able moved their operations to British Columbia and Saskatchewan, where the royalties were more forgiving. The rates made the risks too risky, industry said. With the maximum rates for oil and gas wells increasing from 35 per cent to 50 per cent, the royalties structure penalized success, says Kapusta. It increased the royalties on the best wells, which have to pay for the failures. It was shortsighted, he says. The royalties were changed when the good times seemed endless. The fact that the good times came to a rapid halt practically as the changes were made had a devastating impact on the province. Despite the incentive programs announced this spring, royalties were the major factor in Albertas fall from grace in its standing in the Global Petroleum Survey, according to Gerry Angevine, who co-authored the report published by the Fraser Institute in June. Alberta used to be the second-most attractive place to invest in Canada after Saskatchewan, ranked by the executives of oil and gas companies around the world. That was in early 2007. In 2008 it fell to sixth place.
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This year Alberta sits at eighth spot out of 11 dead last for the provinces. Only the territories, with their icy climates, difficult landscapes and complicated land claims issues, rank below. Anonymous comments are included in the report. Comments include, Anti-energy ambiance, unskilled, uneducated, and inaccessible leadership with out-of-control regulatory expansion, and the companies enjoyed a few good years of profits and in turn get nailed with punitive royalties... All seven comments included in the report are negative. Every one of them mentions the royalties. We didnt just pick negative comments, we tried to get a balanced view but unfortunately in the case of Alberta, there werent many positive comments, if any. There certainly seems to be a degree of bitterness out there and a great deal of unhappiness on the part of the industry, says Angevine.
Its a precarious balance for the provincial government. Royalty rates must be high enough that Albertans get a fair share of the bounty. They must also be low enough to ensure that companies will actually want to invest in the province. However, the survey was taken between February and April. In the midst of that, Alberta moved to make amends. With CAPP forecasting a 27 per cent drop in oil and gas activity in the province for 2009, the province has taken steps to boost the industry. In March, a royalty incentive program, reducing royalties on certain types of conventional oil and gas wells to five per cent or less for a year, was rolled out, to positive reception. Companies can also receive royalty credits of $200 per metre on conventional oil or gas wells drilled. These incentives were extended by a year in June, giving companies until March 2011.
CAPP welcomed the incentives on behalf of the industry. The changes are positive ones, says Greg Stringham, vice-president. There were a number of short-term incentives to ensure we retain the rigs and the labour and the people here as much as possible during the downturn so theyre there, ready, able, and skilled for when the downturn ends. They have already made an impact. It has prompted a number of companies to increase investment in Alberta, or announce they plan to do so when the busy winter drilling season picks up, says Gary Leach, executive director of the Small Explorers and Producers Association of Canada (SEPAC). The drilling incentives in particular have already made a difference in the junior sector, he says. Theyre going to help with generating some additional cash flows so these companies can continue drilling; it translates into jobs for Albertans.
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Looking forward, a competitiveness review of the industry is currently being conducted by the provincial government. The report should be made public by the end of December, according to Jerry Bellikka, spokesman for Alberta Energy. While many are anticipating the reports contents, it continues the sense of instability, according to Angevine. That report is due to be finished in the fall so people arent just sure where were headed. Theres a lot of uncertainty and a lot of unhappiness over the royalty question in Alberta. Its a fine balance, says Bellikka. Weve heard from a lot of people in the last few years who felt that Albertans werent getting their fair share of royalties. At the same time, weve heard from companies who say we can only afford so much before development is not economically feasible, so weve tried to strike a balance between those two.
Industry will be watching carefully. All provinces have an awareness of how important this is. They are aware that capital is mobile, that companies, on behalf of their shareholders, have to invest where they get the best rate of return, says Leach. Sometimes just one, two, three per cent on an invested dollar has a huge impact. Though the changes in 2007 were aimed at giving stability and predictability to the oil and gas industry according to Energy Minister Mel Knights introduction to the New Royalty Framework, he has publicly said since that the government will make more changes if necessary after the competitiveness review is completed. However, in order to encourage more investment, particularly from big international companies, theres a trust element that needs to come back, says Kapusta. I think thats certainly been damaged over the last couple years.
The Alberta government has scaled back some of the royalties that hit the oil and gas industry hard, and some say it has helped the situation somewhat, but the slowdown of activity in the province has continued right into the fall.
There certainly seems to be a degree of bitterness out there and a great deal of unhappiness on the part of the industry. ~ Gerry Angevine
Co-author of Global Petroleum Survey
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British Columbia holding its own

In 2008, the situation in B.C. was downright rosy but tighter economic times this year have altered things somewhat. It could otherwise be the perfect combination: plenty of previously lockedup gas finally accessible and cheap royalties to boot. A heavily natural-gas weighted province, B.C.s revenues have taken a hit. The budget, released in September, forecasts a $2.8-billion deficit a record for the province. Its mostly due to a loss of $2 billion in revenue, Finance Minister Colin Hansen said when announcing the budget. The royalty incentives will benefit both the industry and the provincial revenue, says B.C. Energy Minister Blair Lekstrom.
The future will really tell how the latest stimulus package works but history shows us that for every dollar we invest in royalty incentive and stimulus like we brought forward, the Crown gets a return of about $2.50, he says. Its an exceptionally good investment on behalf of the people we represent. Particularly during the tough economic times, royalty breaks make it possible for companies to operate when they might have otherwise opted to wait out the downturn. Two per cent of something is better than 18 per cent of nothing, thats how we look at that. Lekstrom. It stimulates the industrys ability to inject capital into B.C. Lau rates B.C. second out of the three provinces. The reason is they have some gas plays
up there that still make sense at these low prices and, on top of it, B.C.s royalties being ratcheted down, that really helps their economics too. B.C. reduced its royalty rates in March, the day before Albertas incentive program was announced. The province offered reduced rates for wells drilled between September 2009 and June 2010 from 20 per cent down to two per cent. Royalties on some new conventional gas and oil wells were reduced to five per cent or less for at least a year. In August, rates on all wells were reduced to two per cent until June 2010. In the Global Petroleum Survey, only two per cent of those surveyed said B.C.s fiscal terms were a strong deterrent to investment. Alberta received a 38 per cent rating. Phil Geiger, president and CEO of Ca-
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nadian Spirit Resources Inc., a junior company with two unconventional gas joint ventures in the province, calls B.C.s royalty structure fantastic. The B.C. government has really responded to industry. Thats what you have to do if youre the government. You have to give people a reason to drill. B.C.s drilling is down 18 per cent this year, according to PSAC projections. Things are still down, but theyre nowhere near as down as they could have been without that type of fiscal encouragement, says Geiger. In addition to the two per cent royalty rate and infrastructure credits, B.C.s royalties include an increase of 15 per cent in the existing royalty deductions on natural gas deep drilling and extend the deep royalty credit program
to include horizontal wells drilled between 1,900 and 2,300 metres. But, of course, the natural gas price rears its ugly head again. EnCana, for example North Americas largest natural gas producer has reported that its Horn River shale gas property needs prices of at least US $6 per 1,000 cubic feet to be worth selling. If companies are too heavily weighted in the natural gas business which last year looked like a really great place to be theyre still struggling because natural gas is still really low, says Leach. B.C. had recorded $300,000 in land sales by September, down significantly from record highs of $2.6 billion in 2008. The province is looking forward to bet-
ter times. When it comes to the shale gas, Lekstrom doesnt mince words. We think it will secure our economic future, without question, he says. When you look back three, four, five years ago, it was not technically possible, says Leach. There are huge amounts of natural gas locked up in shale rock, and only in the last two years has horizontal well technology matured to the point that you can extract commercial quantities of gas from shale rock and its been a huge success. The only problem is that the new technology is costly. We probably need prices that are double what they are today to consistently have people investing enough money to meet the demand for gas, says Leach.
Gary Leach of SEPAC says new horizonal well technology has made some shale gas plays more accessible, but because its costly, a rebound in natural gas prices is needed before exploration companies will really kick into high gear.
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Oils well that ends well in Saskatchewan

Saskatchewan is making a name for itself as the sturdy province of the year. Its oil-heavy resources are holding fairly steady, buffeted from the winds of the bottom-of-the-barrel natural gas prices. Its still not the perfect year drilling is down by 45 per cent, according to PSAC but the province is keeping its head up. Saskatchewan has done very well this year under the circumstances, says Lau. The reason is that Saskatchewan is the oiliest of B.C. and Alberta. Though oil prices took a hit early in the year with prices dipping below $40 a barrel, they have steadily inclined since, hovering around $70 in September. Saskatchewan is doing very well now, she says. Its also creeping out of the shadows as a Western Canada industry contender. Saskatchewan made more than Alberta in land sales (this year) which was absolutely unheard of, says Lau. Success in Saskatchewan comes down to three basic stories: its concentration of oil, the Bakken play and an unchanging royalty program. I wouldnt say theres anything wrong with Saskatchewan, says Howard of CERI. Development is higher in the province because the royalties are favourable there, he says. Many junior oil companies are thriving. In Saskatchewan were not looking for a change, were actually quite happy, says Carl Henneberg, chairman of the Saskatchewan Committee for SEPAC. Though he says the province was not investment-friendly for years, it woke up to realize the revenue potential in the mid-1990s, lowered its royalty rates and kept them there. Theyve been able to keep things pretty stable, says Henneberg. Ed Dancsok, assistant deputy minister of energy in Saskatchewan, says there are no plans afoot to change the royalties. 82
We want to show that we have a stable regime under which people can make investments with the certainty to know what their return is going to be. The royalties make sense, says Henneberg. A lot of the wells drilled in southeastern Saskatchewan are horizontals and theres a royalty-free period to allow companies to recapture their initial drilling costs. I think the Saskatchewan government has really got a balance between what the drillers need to continue to drill and what the province needs to obtain revenue from that resource, he says. Its not to say Saskatchewan hasnt felt the financial crunch. There were 4,045 wells drilled in 2008, says Dancsok. This year, only 1,092 were drilled by mid-September. We knew eventually it would have to happen. Its a cyclical industry we live in, says Dancsok.
Investment dollars echo the drilling. In 2008, the industry invested $4.8 billion in capital spending on oil and gas. In 2009, a forecasted $2.7 billion will be spent. Its almost unfair to compare a boom year to a downturn year, says Dancsok, pointing out that in 2007 there was $3.1 billion in spending the provinces best-ever tally at that point. Theres been a lot of press about Saskatchewan, which nabbed the number two spot in the Global Petroleum Survey. In 2008 it was number one. We always knew here that we had a very strong regulatory regime that would be attractive to industry should they really choose to come and try us out. Of course, the richness of Alberta and B.C. kept the industry there but now with the Bakken play and other emerging plays, industry is realizing there is a resource in Saskatchewan, says Dancsok.
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The big story in Saskatchewan is the Bakken oil play a massive rock formation beneath Saskatchewan, Manitoba, Montana, and North Dakota. (The Bakken is) whats driven things around here. Its been a blessing. Weve waited long enough in Saskatchewan to make some noise and this is our turn, Dancsok says. Bakken oil estimates from Canadian and American scientists run from 100 billion barrels to 400 billion barrels. Saskatchewans known and proven conventional oil is 43 billion barrels, so (the Bakken) is a pretty big prize out there, says Dancsok. Over the past four or five years, Saskatchewan has estimated about a billion dollars in land sale revenue just for the Bakken area. Production from the play was about 600 barrels a day in 2004. This January it was putting out
57,000 barrels a day. In five years, thats quite a growth, says Dancsok. Henneberg operates a junior exploration company in the southeastern part of Saskatchewan. He says the biggest challenge right now is finding pipeline space for all the oil theyre producing. Its a good problem, everybodys doing well and drilling lots. Despite each provinces troubles, the future is looking brighter as the industry rides into the last months of 2009. Projections for oil and gas prices are all upwards, royalty incentive programs are cushioning the blows from the world market and proclamations of the recessions end are starting to be widespread. The U.S. Energy Information Administration (EIA) forecasts gas prices to rise 15.5 per cent in 2010, moving
from US$2.34/gallon to $2.70/gallon. Crude oil prices are expected to rise 20.5 per cent from an average US$60.12/barrel in 2009 to US$72.42/ barrel in 2010. Investment is forecast to pick up and Canadas economy is expected to grow by 2.7 per cent in 2010, compared to a global average of two per cent, according to Albertas Energy Outlook portion of the provinces 2009 budget. Global oil demand is expected to return to regular growth rates in 2010, according to the U.S. EIAs International Energy Outlook 2009. These numbers come from the experts and if their predictions prove true, the brutal truths soon wont be so brutal for the oil and gas gamblers of Western Canada. www.slickworldonline.com
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Arlene Dickinson
Shes taken her own advice well
rlene Dickinson, president and CEO of Calgarybased Venture Communications and one of the Dragons on CBCs Wednesday night phenom, the Dragons Den, has carved out both market share and one of the most effective personal brands in Canadian business history with the best of the marketing prowess that has driven her reputation. Her mantels are full of awards, including her ranking as one of Profit magazines Top 100 Women Entrepreneurs for seven years running. Her $20-plus million business has expanded from its Calgary headquarters to include offices in Toronto, Edmonton and Ottawa, and Dickinsons personal and corporate brand is at a pinnacle. In this, what will be a regular check-in with the Western Canadian Dragons, as well as Western recipients of Dragon funding, editor Kathryn Engel (who finds the fact Dickinsons initials create the word ad poetically appropriate!) accomplishes the rare feat of catching up to the marketing guru who tells Slick World now is not the time to put the brakes on marketing. ke: youve
been outspoken about your emphatic belief in the
importance of intelligent, bottom-line marketing.
why
has
that been such an important theme to stress right now?
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Coutresy CBC
AD: Theres empirical evidence of businesses who not only stay the course but increase marketing efforts through recessionary periods and what they get from that, that points to the fact that not only you should do it but you have to do it you do better than anyone else through the recession but also for the two or three years following the recession as well.
ke: and yet, there is so much fear about the economy; you find people want to pull back as a result. AD: Yes. I know that is a hard thing to hear when everyone is cutting and everyone is looking to save money. Its hard to say continue to spend and increase in marketing when theyre looking to cut back but, in fact, it is the exact thing you want to do because instead of focusing on the 10 per cent of the market share youve just lost, you want to focus on the 90 per cent still available to you. ke: describe the current culture around how is a strong brand responsive to the current culture of consumer fears about the economy? AD: The consumer is looking for a brand that believes in itself and helps them see a way past this current situation and one that doesnt get stuck in it too you dont want to look at a brand and wonder, Hey, are they going to make it out of this, how are they doing, are they confident? Consumers want to believe, and they want to believe you have a brand that can see the future and understand the future enough to not be afraid of what is going on currently. I am a big believer in
a strong brand;
showing courage through that and telling people, Yes, things are bad but we have a strong way forward and were going to get through this and were going to get through this together and when this is over, well be strong. ke: did
ture. you always love marketing?
me about the early years of growing
tell ven-
need to be the CEO who is really good about explaining what your business is to anyone who needs to do business with you. So I loved marketing and I loved what it could do and I felt like it got dismissed as a kind of advertising function and its not. Its about taking your business to the marketplace. ke: tell me a bit about how we are doing for a canadian brand in business. i just returned from south america where i
was inundated with the same theme over and over about how much they love do-
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AD: Marketing and good business are synonymous so what I loved about marketing was being able to tell the story of a business in a way that all the different stakeholders of a business who needed to support it could understand. Its a simple thought to be able to say, Well, lets help you tell people, help you articulate it so your team can understand it and your public can understand it and your potential consumers or business you do business with get you. Most CEOs tend to be very operationally- or sales-focused, but they dont understand what they believe in and their vision is what needs to come out to the world. When people can believe in you and where your head is and your leadership, they will support you. You can find great brands you dont need to be the CEO standing up beating your chest but you
canadians. AD: Canadians, I describe Canadians in business as pragmatic and simultaneously optimistic we have hid our light under a bushel for many generations because Canadians tend to be less of a stand-up-and-shout nation. However, I sense Canadians are feeling much more confident about their values and the things that separate them from the U.S., in particular. That is becoming more clear, so I feel we are a nation coming into its own. We dont have the population or history of some of the countries in which we may be doing business, but what we do have is a natural resource in terms of ... our entrepreneurial spirit, kindness,
ing business with
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generosity, understanding of human nature and then, of course weve got this natural beauty, and natural resource called Canada as a country. I feel like we are like teenagers, we went through this awkward stage for a long time and hey, youve got me passionate about something here we are just about to hit our stride and I really do feel Canadas time is coming. ke: on that note, do you sense, in your role on the dragons den and with the young entrepreneurs you deal with all the time, are they starting to step out internationally with that evolving identity or what are some themes youre finding? AD: Yes, thats one thing I tell people lately. Im really encouraged by the level of intelligence and global thinking by the young entrepreneurs I see. I am constantly blown away by late 20s individuals striving for the ability to compete anywhere in the world. The days of growing a business in your own backyard first have changed you dont necessarily have to grow here first to be successful you can start here and stay here, but (now theres also) selling to markets around the world and thats what technology has given us. So yes, Im very encouraged when I talk to young entrepreneurs when they see that and are thoughtful about it and know they can do anything ke: - have a global mindset? AD: Right, exactly. They are world citizens. Theyre not just in business but they actually care about whats happening across the globe. You know, it really strikes me how people who really understand and are proud of their country are able to take that pride anywhere they can take values of their country and who they are and still do work anywhere in the world. One always wishes resources stayed in Canada that needs to be encouraged more, especially in technology and global opportunities, but Im an eternal optimist.
ke: im sensing that eternal optimism has boded well for you. do you list it as a main ingredient for success in business when youre dealing with young entrepreneurs? AD: You just have to be one you just have to be a cup half-full kind of person, without being blind. Blind passion gets you nowhere, I personally tell people you have to be passionate with thought behind the passion. ke: in the time period in which youve grown your marketing business, when you reflect back do you feel we are getting the message of the necessity of, and direct correlation between, good marketing and good business? is it now more of a given in operational budgets for that reason? AD: You know what, I am going to say no generally to that. I would like to say yes but I really dont think marketing has been elevated the way it needs to be in business schools, and business in general. To me, you talk about triple bottom line businesses to me thats a crucial marketing thought. When a business understands its social environmental and economic issues are all really pillars of a good business telling that story isnt about telling just the social side or Look, were green now, or, We do good business because of this. Its about wrapping that story as something compelling as a whole. I really dont think people are getting that. There are many businesses, unfortunately, who dismiss marketing as something they dont understand the value of and dont believe necessary. Or they know they need it but cant understand it and why they need it and I think that is as much our fault. Marketers havent done a good job of elevating why its important. It has been wrapped up in an advertising problem, which is not the issue exactly in marketing, its about the whole.
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www.cbc.ca/dragonsden
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Parting Thoughts
lionel frey
Cindy Kilani
was reading a business column not long ago that reported the biggest concern for many CEOs within the country was that we maintain our strong trade relations with the United States. In fact, 60 per cent of Canadian CEOs polled shared this stance. I dont discount the fact that the U.S. has, and will, continue to play a significant role in Canadas ongoing development; but after some developments within our own company, Slick International, over the last several months, the statistic just struck me in a different way from what it would have even a short time ago. Six months ago, I admittedly didnt quite realize the extent of opportunities that lie beyond North American borders. Its not that I was nave to the future influence of nations such as Brazil (particularly with the 2016 Olympics now confirmed), India, China, Russia, Mexico, or South Korea to name a few; but, the world has certainly opened up since working directly with people in some of these developing nations. Not to sound like a cheap clich, but it makes you realize that this is a small world after all and it has certainly changed my perspective on business. Over the next several years, I believe many Canadian companies will come to share that perspective in realizing that the world is truly their market. To some degree, development in technology taught us this point; but what the recession has truly shown us is that nothing will ever supersede resourcefulness in a business. The reason some of these countries are being talked about so much is because they are becoming more of a consideration in the ongoing business development of companies that traditionally would have been satisfied to remain in smaller markets, especially while the boom times of previous years prevailed. We have seen what maintaining the status quo can do. Media empires collapse, largely because of not being responsive to changing circumstances that may have been interpreted as mere fads and not trends. Smaller industrial companies had convinced themselves that the only market for their product or service is in their backyard. Maybe theyre right, maybe not.
The point is it can pay to think larger than life. It pays to at least be educated on what and where the opportunities are, and to not simply base decisions on how the past has operated. When we started this magazine, some people told us we were crazy. Why would you start something like this now? was the occasional inquiry. This was coming from companies who were spending exactly zero dollars on marketing, and watching what they had worked so hard to build over the previous several years gradually shrink before them; yet, were paralyzed from taking action because they didnt know how to go about changing their fortunes. While some may react to this type of comment with discouragement, we actually relish it because we know that there is a future for anyone willing to stretch their boundaries. We have seen it internally, and we see it in other nations more and more. The United States will incontrovertibly be an ongoing influence of what we do in Canada, but the moral of the story is to never be afraid to push your boundaries. Its scary sometimes, but then again it isnt. If you believe in what youre doing and, more importantly, believe that your clients wherever they may potentially lie will benefit in what youre doing, it wont matter what others believe. Dont sell your company short and dont fall in the trap that history knows best. When it comes to your business, history has yet to be written and the pen is in your hands. For more than 12 years, Lionel Frey has worked in business development in a variety of capacities. He has assisted start-up enterprises with business and strategic planning, financing, cash-flow analyses, and financial forecasting based on market information.
slick world
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PROMOTION
DEFIANT E N E RGY
Lighting the Future.
Having always been into alternative energy, Travis George knew that the leap of amalgamating his concern and appreciation of the environment with a truly green energy savings technology wasnt that much of a leap after all. We can walk into a business and show them that we will save them 80% on their energy usage pertaining to their lighting. Besides that what is great about multi-chip is all of our products are serviceable unlike current inefficient lighting and first generation LEDs which are both throw away technology that pollutes our groundwater with lead, mercury and phosphorous and unnecessarily puts a burden on our landfills. year warranty. So it makes a lot of sense financially, environmentally, and most importantly, socially. This is what is winning many clients over, particularly when it comes to more challenging economic times for business. This solution makes so much sense. According to George, the strategy is literally paying off for both his company and his clients, although he would like to see the government of Alberta at least make an effort to reduce consumption of energy before force feeding taxpayers higher energy rates for huge unnecessary grid upgrades and large transmission lines they are planning at a cost of 20 billion dollars. We all know (this) will be passed on to both consumers and taxpayers which just do not need it in already tough times. Alberta is the only province that has nothing as far as Eco-energy grants. In British Columbia, a company can have the retrofit paid up to 80% by BC Hydro, with the remaining 20%
Everyone wants to do something good for the environment, lets face it. But when it makes complete fiscal sense to do so its easy for business and government to implement this truly green solution, says George, one of the founders and President It makes the most sense for the big of Defiant Energy specialists in the guys that are using high voltage sales of second generation multichip LED commercial, and high lighting. power outdoor lighting. George outlines a case scenario for The company, only a year old to this a large operation that may spend point, has already made significant hundreds of thousands on a retrofit inroads with businesses, industry of their lighting to switch to multiand municipalities interested in sav- chip LED, but save over $15,000 ing significantly on lighting costs, per month on their bill as a result. while serving the environment at the Within a few years, the retrofit has same time. In fact, the company will paid for itself. After that you have save users 80% on their monthly healthy maintenance-free light that and annual lighting costs with their uses 80% less energy for the next 10 years at least, backed with a fivemulti-chip LED technology.
The town of Beaverlodge is one of the first municipalities in Alberta to adopt multi-chip LED lighting. As a result of their forward-thinking town council, Beaverlodge will put another $5,000 per year back into the towns coffers through a 15-light initial case study. That money can now be allocated to other projects for the community. Also in the works is the design of a state-of-the-art recreation centre. Plans are to include a myriad of green initiatives that will save additional monthly expenses for decades to come freeing money that can be used to fund other projects for kids, infrastructure, etc. Currently, there are a few other municipalities with a similar mind-set, and it is key that residents of these towns back these initiatives in order to maximize their tax dollars. ~Travis George, President
PROMOTION
A GREENER FUTURE
Defiant Energy Solutions is committed to making the world a greener place, especially when it makes so much sense to do so. The gap in technologies from tube-type lighting to solidstate is so large there really is no comparison. When our 100W Multi-Chip LED is 6-times brighter than a 250W Metal Halide Bulb, why do we still use bulbs? When there is enough mercury in one fluorescent tube to contaminate 20,000 litres of water, why do we still use these? The energy savings using our Multi-Chip LED easily offset the cost, effectively putting money back into your business. Defiant Energy Solutions has a replacement for every type of light fixture on the market, with additional new innovative products on the way. The revolution is just starting towards a greener and more efficient future. Defiant Energy Solutions has a simple goal: To accelerate the inevitable adoption of MultiChip LED solutions as the new standard for lighting in Canada by combining Power Smart approved products with innovative tools that will enable our clients to take advantage of the growing number of incentive and retrofit programs offered by Hydro authorities. With a solid network of Energy Management Consultants, we can provide expert onsite consulting and support services before and after the sale. Ultimately, we want our clients to start saving energy and money today, not wasting resources on disposable technology, but embracing our long-lasting efficient lighting solutions and illuminating a greener future for themselves.
financed over three years. throughout Western Canada, This is because British Co- as well as abroad. Defiant is lumbia is visionary enough to mobile and doesnt need a lot realize that everyone will ulti- of overhead to operate, as it mately benefit from this. works directly with the manuAnother factor George in- facturer on the distribution of cludes in his approach with the LED product to customclients is the safety and man- ers, passing further savings hour savings that can be seen, on by cutting out the need for which he admits is something wholesalers. business sometimes overlooks when weighing against Were going to start in Westthe direct savings from the ern Canada because we feel technology. the economy is still strong From the man-hour and safe- compared to other places. ty standpoint, now having Its not full-out, but its still no need to climb ladders or moving. rent lfts to switch out the alltoo-common burnt out light, Im a dreamer and so is everywhich have literally over a one else within the company, decade less life than the multi- so yeah we have a vision and chip LED lighting, essentially we think if we execute it right eliminating safety and mainte- here we will be a driver of the nance concerns. widespread implementation of this truly green energy savIn a short period of time, the company of six has plans to ing technology , only time will make many more inroads tell what our full potential is.
9804 100 AVE GRANDE PRAIRIE ALBERTA P: 780-518-3841 DEFIANTenergy.ca
FOR SALE
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GREG HAGLund 780 831 6094 dELvIn kOSIk 780 831 4697
Slick World magazine is distributed monthly across British Columbia, Alberta & Saskatchewan, as well as to select international markets. Over 15,000 upper-management & executives in manufacturing, resource and professional service companies currently receive complimentary subscriptions. To sign up for your complimentary subscription, or to explore advertising opportunities, visit www.slickworldonline.com. This limited-time offer for a complimentary subscription expires April 30, 2010.
InquIRIES
780 831 7573
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SWANBERG INTERN ATION AL

Poised for Success

slick world Journal

Goliath wont bE stoppEd

December issue of Canadas

Western Canadas Global Entrepreneur Magazine

VOLUME 1 ISSUE 1 EdItOrIaL Jeff McCoshen

editor in chief editorial research assistant contributors

Lionel Frey James Chester Erika Sherk Chelsea Cook

art & dESIgn Tevis Sample

graphic design contributing photographers

OnLInE Jim Layher

CIrCULatIOn / subscriptions Melody Sample MarkEtIng Ryan Avery

national sales director

Peggy Braun Luiz Fernando Souza

PrOdUCtIOn Lionel Frey

Subscription inquiries and back issues: slickworldonline.com | 1-877-754-2560

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