Business Development Initiative

Western Economic Diversification Funding Announcement

On February 18th, 2008, MP Jay Hill, announced Western Economic Development will be providing 181,000.00 in funding support to the Business Development Initiative. This contract is through Community Futures Peace Liard to support Energy Services BC in the Business Development Initiative.

Community Futures is pleased to be a partner in this new initiative to improve the position of the oil and gas service sector in the north to acquire contracts from the oil and gas industry.

The oil and gas industry in British Columbia generates billions of dollars of revenue, creates thousands of jobs and has become the provinces leading natural resource revenue generator in recent years. Notwithstanding that benefit, many economic benefits of the Provinces natural resource flow out of the province through the provision of goods, services, employment and their related taxation to communities and provinces outside of BC.

The need for this project is driven by the industries long term reliance on “relationship” in the procurement of services and the challenge that poses for the BC service sector that live and operate far from the Calgary based decision makers. The BC service sector requires a focused and sustained effort to improve that relationship, and past experience has pointed strongly to the need for a person with oil and gas experience to be the “boots on the ground” to facilitate relationship development. The most common practice for service companies to acquire business opportunities is to visit E&P in their head offices in Calgary. While some business opportunities materialize through other means, the industry expectation is still to go to Calgary “to knock on doors”. When activity levels are down, the practice becomes a higher priority as the E & P are not necessarily casting a wide net to procure services. They are relying on past service providers, relationships, existing agreements and a range of other financial and social policies that vary greatly from company to company and even within divisions of companies. The sector is primarily made up of small businesses who have limited resources to put someone on the streets of Calgary knocking on doors.

The distance factor allows closer service providers (i.e. Red Deer, Calgary, etc) to be more persistent in their marketing with far lower costs based on their proximity. The second big deterrent, even for those companies who can make the regular trips to Calgary, is to determine what the procurement process is within each company and to determine how to develop relationships with the decision makers. This is further complicated by frequent staff changes and company restructuring and corporate takeovers which have been plentiful in recent years. A fundamental goal of the BDI is to “demystify” the procurement practices of the E&P who operate in BC and to develop mutually beneficial relationships with them. This will require focusing not only on building the relationship with the E&P, but developing a stronger, more cohesive service sector prepared to provide safe, competitive and quality services. Funding partners to date are Western Economic Diversification, Energy Services BC, Community Futures Peace Liard, Ministry of Energy & Mines, BP Canada Energy, Canadian Natural Resources Limited, North Peace Economic Development Commission, and South Peace Economic Development Commission. For more information on the Business Development Initiative, visit: www.communityfutures.biz.