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Old 03-06-2021, 03:51 PM   #6001
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Thanks everybody. I’ve heard a few politicians and pundits suggest that even with higher prices, this could be a “jobless recovery” in the patch - with so much emphasis on keeping costs down, companies will realize good profits, but not necessarily ramp up any spending or hiring. What does the brain trust think of this assertion?
I think high skilled jobs will come back, but forget the days of floors of people in tactical functions like basic accounting. Those are all well on way to full automation. For example, 15 years ago paying persons to 3 way match invoices all day is over.

So I see it as an in between recovery. Your strategic roles will grow but that is about it. Shareholders will hang you if your head count creeps up because of tactical roles.

Its a big problem for our government. You will have people making good money and a lot more on assistance with little hope.
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Old 03-06-2021, 03:51 PM   #6002
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Thanks everybody. I’ve heard a few politicians and pundits suggest that even with higher prices, this could be a “jobless recovery” in the patch - with so much emphasis on keeping costs down, companies will realize good profits, but not necessarily ramp up any spending or hiring. What does the brain trust think of this assertion?
Higher oil prices don't automatically lead to hiring, its when management/boards/investors believe future prices will be high that jobs start to come back.

You'll start to see activity go up right away, and as that pressures supply you'll see hiring.
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Old 03-06-2021, 05:46 PM   #6003
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Thanks everybody. I’ve heard a few politicians and pundits suggest that even with higher prices, this could be a “jobless recovery” in the patch - with so much emphasis on keeping costs down, companies will realize good profits, but not necessarily ramp up any spending or hiring. What does the brain trust think of this assertion?
Hearing much of the same. Operators putting much of the money towards fixing their balance sheets before they begin to spend it on drilling etc.

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On the service side I'm still hearing a lot of "even though oil is back over $60, we still need you to keep the rate reductions we forced on you when oil was $0."
Yup. Same old battle. Our prices have been under relentless pressure since probably 2014 and clients are constantly pressuring for lower rates or looking for other ways to reduce what they pay to service companies. At least on our product line.

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If services demand outpace supply the prices will shoot up again like they always have. This is a pretty short term change in oil pricing, it's not exactly time to just set things back to the way they were yet.
Maybe some services can get some kind of increases but not many. And even if they do the money goes right back out the door in the form of wage increases, equipment etc. and we don't often see it on the bottom line. When I moved to Calgary in 1997 our day rates were higher than they are today, and that's not counting inflation.
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Old 03-06-2021, 06:05 PM   #6004
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We’ve raised out rates recently as have some of the services we use. Things are much busier now. At least in my portion of the industry.
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Old 03-06-2021, 06:16 PM   #6005
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I suspect they will be using a lot of contract employees and contracting out work they used to do in house.
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Old 03-06-2021, 07:17 PM   #6006
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Thanks everybody. I’ve heard a few politicians and pundits suggest that even with higher prices, this could be a “jobless recovery” in the patch - with so much emphasis on keeping costs down, companies will realize good profits, but not necessarily ramp up any spending or hiring. What does the brain trust think of this assertion?

I would guess that with transportation still a bottleneck for the foreseeable future there won’t be any big expansion projects. Replacement, optimization and maintenance yes, but not a return to boom. Maybe a new normal if the price stabilizes?
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Old 03-06-2021, 08:41 PM   #6007
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I suspect they will be using a lot of contract employees and contracting out work they used to do in house.
Contract = contingent work force, and yes that's what's happening.
Plus a lot of shorter-term contracts.
High skillset/quality jobs that paid ~$100+/hr even just 18mo ago are now going for $50-70/hr and zero perks. And that's not office jobs, that's running your own vehicle, having your own E&O&liability, own computer/printer/phone, no benefits (except what you choose to pay yourself), still gotta pay taxes, EI, CPP, maybe save a little somehow for RRSP/RESP/TFSA/mortgage/food, etc..., and even at that rate there will be a daily cap, plus working 6/1 shifts, longer, in some remote place and you think you have time to head home to visit family but it's 7-9hrs drive each way.
I'm also hearing of some EPCM's seconding contract workers to the E&P/Midstream/end-users.
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Old 03-07-2021, 04:19 PM   #6008
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I would guess that with transportation still a bottleneck for the foreseeable future there won’t be any big expansion projects. Replacement, optimization and maintenance yes, but not a return to boom. Maybe a new normal if the price stabilizes?
I think you're right.

The true recovery in jobs and economic activity, to whatever level that ends up being, is going to have to wait for the completion of Line 3 expansion and TMX, so basically start of year 2023 (hopefully). If that overlaps with strong pricing it will be interesting to see what happens. I don't believe we will ever see the commissioning of a greenfield oil sands mine in this province ever again, so the massive influx of workers and capital associated with that period up to 2014ish won't come back. At best you would maybe see some bolt on capacity additions, like for example the Teck lease that was rejected last year is sitting right next to CNRL's Horizon mine, maybe they would purchase that lease and then route traffic to their existing infrastructure.

I do think though there is a huge growth opportunity for SAGD projects (thermal oil, no mining required). These projects have a lower cost basis than oil sands mines, but still require a lot of permanent infrastructure that would necessitate a good amount of fabrication work and extra labor that represents a nice capital influx to alberta. They're lower cost, lower impact, and less of an environmental flashpoint than oil sands mines which makes me think companies would be willing to invest new money in them while not doing so for mining. Also the completion of export pipelines and narrowing of the heavy oil differential gives them a huge asymmetric boost over possible mining projects because SAGD produces regular heavy oil and mining produces SCO. There's no differential on SCO, it sells for WTI basically. But a narrowing of the diff gives heavy oil a guaranteed per barrel price boost, plus greater egress certainty, plus more available volume. So I think we'd have a lot of projects that should theoretically get capital, hopefully that comes to pass and we can get a nice economic boost besides just improvement in pricing.
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Old 03-07-2021, 08:57 PM   #6009
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Given the current federal government, it is hard to imagine this sector ever getting a lot of traction
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Old 03-09-2021, 12:35 PM   #6010
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BMO is projecting that Alberta will lead Canada in economic growth this year, with 6.5% growth in GDP

The sustained strength in commodity markets is brightening the domestic outlook in a variety of regions. The full recovery in most commodity prices is not only a big boost to bottom lines, but it is translating into real activity and a better capital spending backdrop. After a brutal first half last year, the resource sector has seen output surge at a 24% annualized clip in the past six months. And with oil now north of $60, we expect Alberta to lead the nation with 6.5% GDP growth this year, and that may well be a cautious call.

https://economics.bmo.com/en/publica...-b0280d43dd96/
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Old 03-09-2021, 02:30 PM   #6011
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Secure looks to buy out their main competition, Tervita, in a 2.3 billion dollar deal

https://www.theglobeandmail.com/busi...-oil-industry/
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Old 03-09-2021, 02:31 PM   #6012
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I think you're right.

The true recovery in jobs and economic activity, to whatever level that ends up being, is going to have to wait for the completion of Line 3 expansion and TMX, so basically start of year 2023 (hopefully). If that overlaps with strong pricing it will be interesting to see what happens. I don't believe we will ever see the commissioning of a greenfield oil sands mine in this province ever again, so the massive influx of workers and capital associated with that period up to 2014ish won't come back. At best you would maybe see some bolt on capacity additions, like for example the Teck lease that was rejected last year is sitting right next to CNRL's Horizon mine, maybe they would purchase that lease and then route traffic to their existing infrastructure.

I do think though there is a huge growth opportunity for SAGD projects (thermal oil, no mining required). These projects have a lower cost basis than oil sands mines, but still require a lot of permanent infrastructure that would necessitate a good amount of fabrication work and extra labor that represents a nice capital influx to alberta. They're lower cost, lower impact, and less of an environmental flashpoint than oil sands mines which makes me think companies would be willing to invest new money in them while not doing so for mining. Also the completion of export pipelines and narrowing of the heavy oil differential gives them a huge asymmetric boost over possible mining projects because SAGD produces regular heavy oil and mining produces SCO. There's no differential on SCO, it sells for WTI basically. But a narrowing of the diff gives heavy oil a guaranteed per barrel price boost, plus greater egress certainty, plus more available volume. So I think we'd have a lot of projects that should theoretically get capital, hopefully that comes to pass and we can get a nice economic boost besides just improvement in pricing.
Maintaining flat production and improving steam to oil will likely be the "projects" in the SAGD realm I'd guess.
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Old 03-09-2021, 02:34 PM   #6013
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Maintaining flat production and improving steam to oil will likely be the "projects" in the SAGD realm I'd guess.
Reducing SOR yields more production per t of steam.

Debottlenecking projects, or cookie cutter expansions will be the growth going forward. There is plenty of low hanging fruit there vs building a new greenfield projects where you have to sink hundreds of millions into access roads, utilities, and camps ect.
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Old 03-09-2021, 08:39 PM   #6014
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Secure looks to buy out their main competition, Tervita, in a 2.3 billion dollar deal

https://www.theglobeandmail.com/busi...-oil-industry/
More job losses, less jobs available.

Yay?
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Old 03-09-2021, 09:11 PM   #6015
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Reducing SOR yields more production per t of steam.

Debottlenecking projects, or cookie cutter expansions will be the growth going forward. There is plenty of low hanging fruit there vs building a new greenfield projects where you have to sink hundreds of millions into access roads, utilities, and camps ect.
Yeah, if we can start seeing expansions sanctioned that'd be great.
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Old 03-11-2021, 08:05 PM   #6016
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https://calgary.ctvnews.ca/calgary-c...site-1.5344022
Interesting story and I'm certain there's a LOT more that is not being said. At a previous company we had some discussions regarding allowing AER people onto some specific leases. The problem most of the time was they arrived unannounced, either no or crappy PPE, no safety tickets or proof of competencies, sometimes really junior or just ridiculously uneducated/naive and needing hand-holding/close supervision, often couldn't read basic design drawings and relate them to the real world, were demanding and aggressive and trying to throw their weight around. Furthermore, they often would not want to go through the site orientation to make themselves aware of the ongoing operations at that site on that day. Sometimes they really should not have been present on the lease, or allowed to do anything more than sit in the trailer and watch whatever operations were going on that involved deadly pressure envelopes, h2s or other gases, large equipment, lots of movement where everyone actually knew their place. Fundamentally, they became the largest site risk themselves... yet were too prideful to understand or accept that tomorrow may be safer for everyone. At least the ABSA (pressure vessel safety authority) knew that when metal vessels go boom it means big things move fast and kill...
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Old 03-15-2021, 09:11 AM   #6017
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https://twitter.com/user/status/1371471951244447748
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Old 03-15-2021, 09:20 AM   #6018
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I swear, this time I've learned from my past mistakes and won't take $100 oil for granted!
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Old 03-15-2021, 11:26 AM   #6019
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I swear, this time I've learned from my past mistakes and won't take $100 oil for granted!
f that, lift kit for the Dodge Ram already ordered.
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Old 03-15-2021, 11:39 AM   #6020
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Where can a guy buy a couple seadoos around here?
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