A new, comprehensive study targets oilfield services and oil and gas technology firms that may lack the “know-how” but aspire to become successful global exporters.
The study evaluates six markets or countries based on criteria such as their access to infrastructure, market-based pricing, socioeconomic and political context, ease of doing business, availability of services and labour, and the probability of success.
Anxious to sign their first contract exporting their services or products internationally, Canadian companies will often accept terms and conditions they would never accept domestically, a panel member told a meeting held to launch the study designed to help such companies enter international markets.
“I would strongly recommend that if you’re going into a market that you don’t know, ensure that you get the proper legal guidance and assistance [and] make sure that you understand the laws, the regulations and that your commercial contract can withstand the jurisdiction that you’re going to operate in,” said Kim Matheson, Export Development Canada’s (EDC) district manager for Calgary. “The commercial contract — whether you choose to mitigate the risk yourself or you look to someone else to help you mitigate those risks — is the underlying document to which we all will look to, to ensure that you’re adequately protected and that the contract is equitable for both parties.
“Without the legal guidance you could be subject to some serious situations, some of which will have a severe financial impact to your organization,” said Matheson, whose organization provides Canadian exporters with financing, insurance and bonding services as well as foreign market expertise.
Going Global: Helping Canadian Companies Navigate International Opportunities is available as a free download on JWN’s website.
It was created by the Petroleum Services Association of Canada (PSAC) and the Canadian Global Exploration Forum in partnership with JWN with the support of the Government of Alberta, the EDC and the Business Development Bank of Canada.
The report whittled down the approximately 120 countries worldwide producing hydrocarbons into the 10 or 15 per cent of countries — 16 of them — that account for about 75 per of the world’s spending on services and supplies, and considered 35 metrics, said Bemal Mehta, senior vice-president of energy intelligence at JWN, a co-creator of the report and publisher of the Daily Oil Bulletin.
“What we wanted to do is provide the narrower short list so if you’re starting to take your first steps [into exporting] it may give you a little bit more guidance around where to focus your efforts,” said Mehta.
Those 16 countries are viewed as the most promising from a services and supplies expert’s perspective, Mehta told the launch event.
The report lists the countries’ reserves, five-year average production, the number of active explorer and producer companies and the number of active Canadian E&P companies in each country.
The first Going Global report is focused on the Western Hemisphere because an increase in regional trade agreements in recent years has resulted in what the authors see as de facto economic zones: Argentina, Brazil, Colombia, Mexico, Peru and the United States.
The second report is expected to be released in January and will focus on the remaining 10 countries.
The current report offers insights from Alberta exporters and makes recommendations.