Tekoil and Gas Corporation is interested in dealing with local businesses in Western Newfoundland.
That was the message brought forward to the Bay St. George Chamber of Commerce at its closing luncheon for Small Business Week on Friday when those in attendance were addressed by Sandy Goulding, manager of business development for the company's Canadian operations.
He said the company has been working hard at getting together a vendors list and it wants to do business locally as much as possible, providing there's no gouging.
"We have a commitment that even includes locally owned businesses on top of the list and, every opportunity we can, we will buy locally," Goulding said. "For the supplies not available locally, we encourage businesses here to form partnerships with drilling supply companies on the Avalon Peninsula."
He feels barriers need to be broken down in the region and that people in Western Newfoundland need to recognize that the entire west coast can benefit from this development.
"Our president Mark Western felt when he came here to visit and drove into Stephenville from Corner Brook that Western Newfoundland was a place that he wanted to do business," Goulding said.
Tekoil is planning drilling operations in Little Port near Lark Harbour, starting in late November this year. Goulding said it has already contributed to the economy of that area and will be doing so for awhile yet. He said the company is spending 60 per cent of its budget in the local economy.
The company is also planning a drill rig refurbishment operation in Stephenville. Goulding said it is moving along and expected to take about eight months before it's in operation. However, leading up to that time, there will be employment through renovations of the old Stephenville Gardens building that it has found out is suitable to use, but needs some environmental issues addressed.
He said there were several reasons Tekoil decided on the rig refurbishment operation, including: the difficulty and high cost of securing rigs for drilling in Atlantic Canada and Quebec; the need for increased drilling activity in Western Newfoundland; and the fact that it's about $20 million cheaper to refurbish than lease or buy.
Goulding said also there is about $18 million to $25 million in profit to be made from refurbishing a rig and having the added value of using it for a year before selling or leasing. He said there is a global demand for rigs and there is a great human resource base here.
He said the company is looking to the offshore as well, and will have some 3-D seismic completed of its offshore exploration block, EL-1069, in 2008 and is hoping to drill there in 2009. That block is located off the Port au Port Peninsula and covers more than 2,000 square kilometres.
Goulding said the company is hoping to have a long-term impact on Stephenville and area with their refurbishment operation, and even further throughout Western Newfoundland with its planned drilling programs if it reaches the success it is hoping to achieve.
