Now that we are well on the second half of 2016, it seems that our provincial, and to a lesser extent, Canadian, business community is finally preparing to settle into the new normal.
We can no longer describe our now, two-year economic malaise, as a temporary condition.
What we have now is our new reality on all fronts.
We have no gravy train days to look forward to on the economic fronts, at least not anytime soon.
Those who are longing for the days of $100 oil, or even $90 oil, to help them dig out of their money pits, are merely dreamers.
As one veteran of the oilpatch noted last week, “If you haven’t learned how to run an oil production company by now, this certainly isn’t the time to learn.”
Or perhaps this is the perfect time to learn?
The new owners and managers will have to operate on the lean and mean model while those who learned to rely on the $90 oil production for their successes and have been unable to adjust over the past two years, will be folding their tents very soon, or have already waved the white flag of surrender by selling off for whatever could be salvaged from their decimated operations.
Whether it be junior producers or middle and major upstream and downstream corporations, the time is ripe for new outlooks, new directions and new ways of doing business in a toughened up industry.
There is still money to be made with oil prices resting slightly over $US40 for West Texas Intermediate, even with regional discounts having to be applied to get the product to a respectable market.
The fact that no new pipelines are being built, or even promised, thanks to a misguided and over zealous anti-pipeline community, is just one of the hurdles that the new oil production and service management teams will have to contend with over the next several months.
The wonderful days of bonuses, dividends, overtime offers, new vehicles and prize packages are only pleasant memories. Today it’s all job sharing, layoffs and EI eligibility.
Big trucks with big accessories are being sold as are drilling sites and trust funds.
This is more than mere belt-tightening for a hard-pressed industry we have come to know and love.
What saddens us almost more than anything else will be the loss of so many very good people who will be taking the proverbial unemployed bullets through no real fault of their own. After all, getting into the oilpatch was a darn good idea in 2006 and 2009 and 2010. There was money to be made, jobs and careers to build and, yes, friendships to be made in a vibrant sector that was a serious engine of growth for the whole country.
Now that events have taken us back to what used to be normal circumstances and situations, we are finding out and confirming the fact that only the strong and the smart are going to survive.
Maybe that will be a good thing in the long run. Maybe it was time to cull the weak members of the oilpatch herd. If so, it’s still tough to take, whether you are a victim or a survivor. This has been a lesson well learned, we hope.
