Royalty storm can't dampen upbeat mood at oilsands trade fair
Firms display inventions and muscular machines
Gordon Jaremko
The Edmonton Journal
Friday, September 21, 2007
EDMONTON - Not a discouraging word was heard Thursday as dealers in industrial supplies from cleaning fluids to computer software courted potential customers at Edmonton's first annual oilsands trade fair.
"The mood's very upbeat and positive," said Garry Bondarevich of Stewart Weir & Co., an engineering and surveying firm heavily involved in bitumen belt and upgrader alley projects.
"We're a little bit concerned," said his show booth partner, Ron McGaffin. But the province's proposed royalty hikes, revealed on the eve of the trade fair, did not cast the same shadow on the industry as on stock markets, where shares in oilsands developers dropped, he added.
"We're desperately looking for engineers and surveyors. We're short. We have the work but can't find the people," McGaffin said in reporting the industry did not change overnight after the provincial royalty review panel released its report Tuesday.
"It's a tempest in a teapot," said exhibitor Bill Hume.
As a mining engineer with North American Construction Group, a major oilsands construction contractor, he pointed out that an immediate bitumen belt slump is unlikely. "The projects that are out there working now are committed for the long term," Hume said.
"There was no panic," North American business development manager Barry Grundy agreed.
Hume added that as an avid oilsands investor in his personal affairs, "I was upset" at first by the royalty report and the market reaction. But after working out the effects of the proposed increases he said "it's been a bit overblown."
If the proposed royalty increases go into effect, the extra burden on the industry works out to about 32 cents per barrel of production currently, 86 cents in 2010 and $1.35 in 2016, the engineer calculated.
Linus Hakimattar, an exhibitor for the IBM "oilsands centre of excellence," called morale at the trade fair "very positive. With oil and the Canadian dollar at all-time highs there's a lot of optimism about the long-term future," he said.
He echoed fair goers in predicting "a political settlement" on royalties between industry and government.
"There's a lot of tire-kickers here," said Stuart Wright, demonstrating a line of industrial cleaning products that his Evergreen Solutions already markets to oilsands projects.
"Conventional oil and natural gas drilling has been on the down slide for six months. That has nothing to do with any talk about royalties," said Wright.
When it comes to the oilsands fair, "there's no sign of a slowdown" in early work on the second annual Edmonton show next year, said event director Wes Scott of dmg world media (Canada) inc.
This year's inaugural show outperformed its former Fort McMurray location by attracting more than 600 exhibitors and registered visitors.
gjaremko@thejournal.canwest.com
© The Edmonton Journal 2007
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