The oil sands sector is at a critical juncture, but 2014 could be the year it finally “comes of age.” While the big strategic challenges of market access and regulatory uncertainty around carbon emissions persist, companies can get a handle on key operational management hurdles through five “rites of passage” we identify in this year’s edition of Gaining ground in the sands, including the following:
At least as far back as 2006, it seemed the solution to every oil sands problem was money. The priority was growth, and no financial cost was too great. That put the oil sands on the global stage, but it also drove up costs. More than growth, today companies must show investors profitability.
Negotiating peer pressure
Combined, the emerging LNG sector and the oil sands are estimated to need more than 40,000 new hires in the next decade, competing in many cases for the same pool of skilled workers. While this could make for a heated industry rivalry, we see both sectors evolving to become more efficient.
Despite conventional wisdom about the advantages of innovation, research shows it is often imitators who benefit most. While the oil sands have been a centre of technological innovation, they would do well to imitate successful practices in operational management from other sectors.
Standing on your own two feet
Better asset management is an opportunity for increased profitability. The challenge is making the best use of collected data. Asset analytics promises increased ROI on equipment and talent alike.
Leaving the nest
Since 2005, Canada has received the third most Chinese investment of any nation in the world. However, recent changes to the Investment Canada Act threaten to make it harder to attract this kind of capital in the future. Canadian producers will have to do more with less while continuing to improve their environmental bona fides in order to keep investors happy.
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