Five Things Vendors Need to Know About Major Oil Sands Operators

Owners and vendors in the oil sands have opposite strategies, and because people rarely move between these two worlds, it’s very difficult for them to understand each other.

Since I moved from major operators to independent practice, I have started noticing some misconceptions about how to secure more business with the major oil sands operators. I wanted to address them to make your work easier and improve your odds of getting more contracts.

1. “I need to talk to someone internal for a major company to procure my services.”

On their Prospective suppliers page, Cenovus addresses this in their FAQ:

"I know someone who works at Cenovus. Can I just go through this person to try to obtain a contract or work as a potential supplier?"

They answer directly: “No. Working with our Supply Chain Management team gives you the opportunity to present your company’s capability to our internal teams.”

What this means is that they want you to complete their form first. Might sound tedious, but entering through the front door is the cleanest path. Use it as a chance to present your services the right way.

2. “Major companies only work with their existing vendors.”

To be competitive, they need to have a wide pool of vendors to conduct a fair bid process for almost any service that owner companies procure. They can't reach the lower costs shareholders demand by sticking with the vendors they already use. When I worked in Project Management, most of the project savings (in the dozens of millions) were achieved through competitive bids. They want you, but getting on the bids is the hard part.

3. “Their requirements are impossible to meet.”

Most companies I talk to are extremely technically competent, know what they’re doing, and what standards to follow. And major operators are not looking to make the process harder than need be. They want to ensure safe and reliable operation once something is built or maintained.

There’s actually an opposite trend internally to try to eliminate unnecessary rules and move to “industry standards.” Ask to see their standards related to what you do (welding, engineering, new technology). A lot of them will be easy to meet or achievable after creating an action plan.

4. “Oil industry is dying, and nobody is spending money there anymore.”

Whatever the market condition is, major oil sands companies have to keep the plants running, and they have to do so safely. For that, they need to replace their pipes every so often, build dams around tailings, measure the temperature and pressure of the process bitumen. Your glove-making company will be fine if they still want their workers to keep their fingers.

5. “They are an old industry resistant to innovation.” Or the opposite: “They are too advanced to need old culvert pipes I’m selling.”

If you sell something new, the resistance you hit usually comes from risk management assumptions. Show how your technology controls risk and the pressing problems it is solving. With complex production like oil sands, there’s no shortage of pressing issues.

And for proven materials commonly used and routinely replaced, if they don’t buy your pipes, contaminated mine water is going to flow to the road. Not great (AER can confirm). But do they really need to spend $10k per metre on it? Also, no. Your straightforward steel pipes are fine (but price it accordingly).

In the end, relationships still matter, but if you enter through the front door, your company will get a fair shot.

And I can help you show up right.