Saskatchewan goes to Alberta to steal some oil business
Sask economy minister trying to lure oilpatch to move investment
In front of several hundred people from all facets of the oil and gas industry, Saskatchewan's economy minister pitched his province as the land of stability.
Bill Boyd began and concluded his speech boasting about the province's safe and secure resource royalties, a contrast to Alberta where the NDP government is pledging to review its royalties.
Boyd sees an opportunity to capitalize on the uncertainty in neighbouring Alberta and steal away some business.
"We've always been in competition," said Boyd about Saskatchewan and Alberta competing for oil and gas investment. "Certainly we've had productive conversations here in Calgary."
Boyd is in Calgary for the Global Petroleum Show, a massive conference and trade show with about 50,000 attendees from around the world.
While the oil and gas company headquarters of downtown Calgary won't be vacating anytime soon, companies might choose to spend more money outside of Alberta because of the uncertainty. Some firms have already hinted they may shift some operations to Saskatchewan from Alberta, including Bonterra Energy and Crescent Point Energy.
"Some companies we've had discussions with, we expect to see further capital allocation in our market in Saskatchewan," says Boyd. "Companies are looking for jurisdictions where there is stability, certainly regulatory and royalties."
Fraction of the resources
How much business the province might be able to poach from its neighbour is another matter.
"Saskatchewan only has a fraction of the resources," noted Peter Tertzakian, chief energy economist at ARC Financial, on the sidelines of the energy conference.
The bid to attract companies east will also be limited by the nature of Saskatchewan's energy reserves, which contain much more oil than natural gas. That said, every bit of economic activity is still welcome in the province, particularly as GDP growth continues to slow along with falling crude prices.
Talk about companies moving out of Alberta could be a bluff.
"I think it's a lot of sabre rattling and they're not going to follow through as much as they say they are," said Jeff Seaborn, who relies heavily on Alberta's energy industry for his service company Integrity Equipment.
On Tuesday night, Alberta's new energy minister, Marg McCuaig Boyd, acknowledged there is some uncertainty in the province right now, although she tried to calm any fears.
"Alberta is — and will always be — a healthy place for private investment under our government," said McCuaig-Boyd in a speech at the conference's opening reception.
Boyd said companies are telling him they are in a state of flux right now in Alberta, unsure what changes the governing NDP will make.
Concern about royalty review
"There is a little concern about the NDP," said Randy Cusson of Calgary-based Zerocor Tubulars, an oilfield service company. He wonders how premier Rachel Notley will approach the royalty review.
"I think she will move quite slowly on this. She's going to try and not make any missteps because she has a lot at stake and I imagine she wants to stick around for more than four years," he said.
Boyd describes the concern as understandable.
"If you were going to make a very, very large investment, you had investors behind you, you had banks backing you up, they obviously want to know what the climate is going to be. In Saskatchewan, they know what the climate is going to be."
Boyd will deliver a dinner speech at the Saskatchewan business reception on Wednesday evening.