Labour challenges may limit rig reactivations: Calfrac

Image: Joey Podlubny/JWN

Management at Calfrac Well Services Ltd. cited labour as a “key constraint” in Canada as the contractor prepares to re-deploy idle pressure-pumping equipment later this year.

In a conference call Wednesday, Calfrac chief executive Fernando Aguilar expanded on the point, after being asked to compare the Canadian labour picture with the situation in the United States, where some oil and gas basins are seeing brisk demand for industry workers.

Back in 2014, when Western Canada’s industry was booming, Aguilar recalled a number of studies that reached similar conclusions: Alberta was roughly 100,000 workers short of meeting the industry’s needs, which led oilpatch companies to take various steps to attract people to the industry.

Later, after the downturn hit, some of the workers who had come to Alberta, along with others in British Columbia, decided to leave the industry. “Of the 200,000 to 300,000 people who left during the downturn, one third of them are back with us, one third are not coming back, and the other third is watching to see if the industry is going to be stable enough,” Aguilar told analysts and investors.

Since then, the company’s efforts to attract workers has paid off, both in terms of bringing back former Calfrac employees and in recruiting new workers, he said.

“We’ve been successful in attracting people, [including] 60 to 65 per cent of [those] who used to work for Calfrac, out of the 2,500 [workers] we released in the downturn,” he said. “[Our] Canadian business is incorporating those activities. We have exhausted local [labour] pools in the area [and] are trying to attract people who are younger, coming from different industries and provinces.”

U.S. situation

As for the U.S., he called it a “very different market,” in part because of a population that’s roughly 10 times Canada’s population. As well, despite mediocre commodity prices, activity in some U.S. basins is not abating. “Texas is basically booming, between activity picking up in the Eagle Ford and in the Permian [Basin], where I think no more permanent employees are available, because they are already working for [other] companies,” he said.

If companies working in the Permian add more equipment and workers, the latter will have to come from other states, he said. The Eagle Ford is another story. There, some workers are former Calfrac employees, and overall, the area does not face the same labour constraints as the Permian, he said.

For its part, North Dakota is different again, due to more limited human resources, and he believes the Bakken could face real labour constraints. In Pennsylvania and Colorado, where Calfrac also operates, the company has succeeded in attracting people, but the task was not without effort.

“Is [recruitment] easy?” he asked. “No, it is not.” In the U.S., as elsewhere, he said people are watching how the industry is responding and how commodity prices are affecting producers’ plans.

“It’s a challenge, but we have a very good human resources group, which has done an amazing job at attracting the people we need for our business,” he said. “As we continue adding [pressure-pumping] fleets, and increasing the number [of workers] in our training centers, this operation is going very smoothly for us.”

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