A combination of "game-changing technologies" and the discovery of an oil field that "wasn’t supposed to be there" are driving Manitoba’s oil and gas sector, according to the president of Tundra Oil and Gas.
Dan MacLean was the keynote speaker for more than 300 Brandon Chamber of Commerce members yesterday at the Keystone Centre. It was all part of a one-day seminar organized by the chamber entitled: Manitoba to Montana: Business Opportunities in the Bakken.
"Welcome to the oilpatch, Brandon," MacLean said to start his address.
After explaining how the process of fracking horizontal wells, combined with the discovery of the Daly Sinclair Field in the southwest corner of Manitoba, changed the province’s oil trajectory, MacLean spoke candidly about challenges and opportunities in the sector.
Changes in the royalty structure on Crown-owned land means the industry is still competitive with its provincial neighbours, but no longer has an advantage.
If there is one place that extra revenue to provincial coffers should be invested, it’s Highway 256. Following his address, MacLean said it would cost about $24 million to transform it into an "all-weather" road.
"It’s the lifeblood of bringing oil from Waskada into the Cromer area where it can get into the Enbridge system and if it is shut in during break up then everything grinds to a halt or we have to find some other tortuous route to bring oil into the system," MacLean said. "We’re hopeful the government has that message."
There have been approximately 1,500 horizontal and vertical wells drilled in the Daly Sinclair Field since its discovery in 2004. It’s also the most productive field in the province, yielding 7.6 million barrels of oil last year.
As the province’s biggest oil company, MacLean said Tundra weighs the environmental concerns in every barrel of oil they recover.
"There are a lot of moving parts in the oil patch, we have pump jacks that are operating between minus 30 C and plus 30 C, we have systems and controls on them, but sometimes stuff leaks," McLean said.
Last year, a spill in the RM of Pipestone cost the company millions. Ultimately they paid to return the land to normal, but communication with the RMs was criticized.
MacLean said they contacted all the authorities, but overlooked municipal governments.
"We missed talking to them and we shouldn’t have."
While he hasn’t heard any concerns about area housing, the labour market has proven a challenge. MacLean said finding quality technicians in a variety of fields has been tough.
Tundra has had the most success training people internally from summer programs. MacLean said it’s hard to recruit to Manitoba if the worker doesn’t have a local connection.
A new export facility has alleviated some of the pressure of getting Tundra’s crude to refineries and export terminals in Eastern Canada and the United States.
However, MacLean remains hopeful the Obama adminstration will approve the Keystone XL pipeline, which would remove thousands of barrels of heavy crude from the Enbridge system, allowing capacity for lighter crude into the pipeline at Cromer.
"We’d like to see them move forward with it, but they’re going to do what they want to do, and in the meantime the industry finds creative ways to get around it. Rail cars are one of them and we all know it’s probably not the safest way to do it, but there is an opportunity and we’ve tried to take advantage of it, as have other companies," MacLean said.
MacLean was one of six speakers during the seminar. Chamber president Craig Senchuk was impressed with the turnout as more than 200 members signed up for the speakers, while more than 300 took in the luncheon.
"A lot of the people here are just trying to learn," Senchuk said.
The seminar touched on a number of topics from fracking and horizontal drilling to who the major companies are in the area and where they are drilling.
"This is the first step of a decade, or two, or three, of activities around the oil field here," Senchuk said. "If we can get some co-ordination and establish some more events, from a chamber’s perspective we want our business members to thrive and we want to expand."
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