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(Last updated: 6 Nov 2008)
Trends and opportunities
The market
The Canadian economy is experiencing greater economic growth than it has seen in the past three decades, largely fuelled by a boom in oil and gas developments and exports. This growth is determined to be highly sustainable due to high world energy and resources demand. These dynamics drive economic and infrastructure development across the country. Canada is the world’s third largest natural gas producer and the world’s eighth largest crude oil producer.
Oil and gas production in 2005 was 2.5 million barrels per day (bpd) and is projected by the Canadian Association for Petroleum Producers (CAPP) to rise to 4.9 million bpd by 2020. The most significant trend is the shift from the current 1 million bpd from oil sands to 3.5 million bpd from oil sands. This activity is centered in the province of Alberta.
Simultaneously, offshore drilling for oil and gas off the East coast will add 500 million bpd of oil. This rapid development is driving energy-related infrastructure as well as civil infrastructure in Alberta and in the Maritime provinces. The Western province of British Columbia is being driven by high growth in trade between Canada and the emerging Asian economies.
Opportunities
Major capacity expansion in energy infrastructure in Canada is taking place in Alberta. The nature of upstream activity is somewhat similar to open-cut mining, which present some opportunities for Australian companies providing equipment and consumables.
The expansion of the process train comprises pipeline projects, which is forecast to let C$4 billion projects in the next three years and an additional C$6 billion in processing and transportation infrastructure. Major Australian companies providing engineering services in these areas are well suited to this profile of projects.
The immediate task is to build on these relationships and to develop relationships with the major oilfield operators such as Suncor and Syncrude as well as the processing companies such as Shell Canada, Imperial Oil, Murphy Oil, Nexen, Petro-Canada and Encana. The principal value-add that Austrade will offer in this sector is managing access for Australian companies to these project opportunities through opening doors and representation for their bids.
Sub-sectors opportunities:
Energy infrastructure:
- Engineering services
- Front end engineering and detailed engineering services
- Individual and joint bidding EPC projects
- Exploration and drilling servicesOilsand mining services
- Geo tech services
- Equipment and consumables
- Oilfield equipment
- Downstream processing technology (Processing technology products, equipment and services)
Competitive environment
Canada is a mature and highly competitive market with some of the world's most prominent multinationals present. Shell, BP, Chevron, Total, Enbridge, Imperial Oil, Nexen, Petro-Canada, Worley Parsons, Alcan, Noranda, Rio Tinto, BHP, and many others are operating in Canada. |
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Tariffs, regulations and customs
Each product is judged on its own merits. French and English labelling is required for most products.
The federal government, the 10 provinces and the three territories all levy a tax on corporate income. The Canadian income tax system establishes income tax liability based on two concepts: type of income sources and residence. |
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Marketing your products and services
Market entry
All types of market entry strategies will apply depending on the financial abilities of the exporter/investing company. A local strategic partner (ie. licensee, manufacturer, distributor, joint venture arrangement, etc.) is recommended for cost-efficiency.
Many international companies choose Canada as their primary entry point to North America. Not only does Canada have relative cost-advantage as an office location, but it boasts North America wide integration of distribution channels.
Canadian companies are equally or in some cases more likely to partner with an Australian business than US business, partly due to similarity in historical backgrounds and understanding of each other’s market entry challenges.
Distribution channels
There are two traditional distribution channels that prevail, direct sales to the oil and gas companies and selling through distributors. Many manufacturers of heavy machinery (with a large initial capital cost) sell directly to the mining companies or at least are contacted directly by mining companies for specific bid tendering. Manufacturers of less expensive, smaller pieces of machinery, often sell through local distributors.
It is recommended to Australian firm who plans to sell directly or through a distributor, to contact the company’s engineers and purchasing department. The key decision criteria employed by oil and gas firms for successful inclusion on the bid list are: product quality, track record, servicing and price. |
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Links and industry contacts
Oil and gas–related resources
Alberta Oil & Gas Directory – www.global-serve.net
Search for Canadian provinces, and some US states, and by category of business. It is also possible to search for a specific company name. You can get the contact information, and sometimes the web site and an email address.
Canadian Oil Register – www.canadianoilregister.com Paid subscription only
Canadian Oilfield Service and Supply Directory – www.cossd.com
Search by city or by category. You do not get a lot of detail on the activities of the company, but you get their contact information, and all of the other offices that they may have in Canada, and possibly a colour ad. There is also a listing of trade shows available.
Industry Canada – http://strategis.ic.gc.ca/cgi-bin/sc_coinf/ccc/index_gen/company.pl?lang=e&profileId=1336
Oilfield Canada Directory – www.oilfieldcanada.com
Search by category or by city. The information provided for each company is limited, but in some cases, the companies provide a link to their web site.
Oil Directory – www.oildirectory.com
Search by city, category or by alphabetical order. The information provided by company is quite extensive. You can also find job opportunities, upcoming events, and industry association links.
Government, business and trade resources for Canada
Canadian Association of Petroleum Producers – www.capp.ca
Petroleum Services Association of Canada – www.psac.ca
Small Explorers and Producers Association – www.sepac.ca
Bid opportunities
Alberta Government Opportunities – www.marcan.net/english/index2.htm
Free access
An inventory of all major Alberta projects can be viewed at – www.alberta-canada.com/statpub/albertaConstructionProjects/mpindex.cfm
If you have a specific country in mind, contact the Trade Commissioner in that region to find out how opportunities of tender are advertised. Some companies will publish calls for tender on the government procurement site – http://infoexport.gc.ca/iei/WorldMap.jsp?lang=en
Other websites that may provide assistance:
Media (Subscription only)
Doig's Digest – www.cipid.com/Doig/main.cfm
An extremely informative report that lists where Canadian exploration and production, drilling, pipeline and service companies are operating and lists locations and contact information.
The Electronic Business Intelligence Service – www.alberta-canada.com/ebis
Probably the best way to access tender opportunities – both regional and international.
Oil Week Magazine – www.oilweek.com
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Contact details
The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.
Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.
Austrade:
- Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
- Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
- Administers the Export Market Development Grants scheme.
- Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
- Provides advice to the Australian Government on its trade and investment development activities.
- Delivers consular, passport and other government services in designated overseas locations.
A list of Austrade offices (in alphabetical order of country) is available.
More information
For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au |
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