Western Canada oil sands opportunity knocks in East
By Jeffrey Jones
CALGARY, Alberta (Reuters) - Oak Point Energy Ltd is an Alberta start-up looking to make its mark in the booming oil sands sector, and Ontario figures big in its plans.
Oak Point, founded by two Alberta energy veterans, has developed an innovative modular system to produce bitumen from the oil sands, an off-the-shelf product offering some protection against cost inflation that's creeping back into new projects.
Tapping Eastern Canada's manufacturing sector to build the gear for the West's booming energy industry is one way to beat back cost pressures while allowing other parts of Canada to cash in on the opportunity, said Ken James, privately held Oak Point's co-president and chief executive.
The two regions of the country have long been bitter economic rivals, and have also moved in different directions. In the West, energy lifted the Albertan economy, while the high Canadian dollar, global recession and downturn in the auto industry hit Ontario, Eastern Canada's manufacturing heartland.
"Our thinking is we want to use the existing infrastructure, existing stable workforce of Eastern Canada," said James, whose company is also developing oil sands leases and planning for an eventual initial public offering.
"They know how to build things for Canadian climatic conditions, they speak the same language, and we also believe that there is great merit in getting political alignment and sharing the benefits of the resources of Alberta."
It's been a tough run in Ontario, the country's most populous province. In the last year alone, its once-mighty manufacturing sector shed 32,000 jobs, according to Statistics Canada.
Just last week, Caterpillar Inc (CAT.N: Quote) shut its Electro-Motive locomotive plant in London, Ontario, after failing to force through deep wage cuts. At least 450 people lost their jobs. Continued...