Access to markets, talent and capital dominate oilsands top 10 risks list in 2013
(Calgary, December 17, 2012) Above the ground — or below — opportunities and challenges in Canada’s oilsands sector, particularly around access to markets, talent and capital, are creating a new environment for players, according to Ernst & Young’s annual report, Exploring the top 10 opportunities and risks in Canada’s oilsands 2012-13 (5.5mb) .
“Rising supply and falling demand from the US, market access and infrastructure constraints, cost inflation, and labour availability are atop our annual risks list. These are clear signals that companies urgently need to tie down new long-term customers, attract and retain talent, and seek new and creative capital sources,” says Barry Munro, Ernst & Young’s Canadian Oil and Gas Leader.
But accessing new markets requires significant investment in infrastructure — and fast. Joint ventures and strategic partnerships are becoming more attractive to companies looking to accelerate resource development, particularly in light of Canada’s new oilsands foreign investment rules.
“Accelerating growth without giving up competitive advantage is a balancing act,” says Lance Mortlock, Partner in Ernst & Young’s Oil and Gas practice. “Securing adequate returns on investment requires companies to have a complete understanding of their risk profile and risk appetite. Successful partnerships should protect your company’s competitive resources while furthering your position in the marketplace.”
Collaboration enables companies to share costs and mitigate a number of this year’s top risks by sharing leading practices in areas such as technology, environmental reclamation, social and economic performance as well as creating a common labour pool to maximize resources.
“With so many complex issues at play for oilsands companies, 2013 will be a very dynamic year,” says Munro. “Winners and losers will emerge as company executives and boards grapple with their strategic choices.”
Canada’s oilsands will continue to play a critical role in world supply and energy demand but success in the year ahead won’t come easily.
Top 10 risks
Top 10 opportunities
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