Oil Patch Wings

Avatar for Graham ChandlerBy Graham Chandler | May 23, 2012

Estimated reading time 17 minutes, 28 seconds.

It has been heard from some not-too-reliable sources that if Suncor corporate fleet was an airline it would be Canada third largest. But that may be an urban myth; other estimates place it tenth or eleventh. In any case, it is one of the oil and gas industry largest fleets. 
Historically the Canadian resource sector has depended heavily on business aviation, said Sam Barone, president and CEO of the Canadian Business Aircraft Association (CBAA). The more remote some of these resources were found, the more the dependence on business aviation. Calgary, after Toronto, can boast the second largest concentration of corporate headquarters in Canada and probably the largest on a per capita basis. When you’ve got that concentration with the resource sector, it going to drive business, said Barone.
Business aviation in Canada oil and gas industry is a combination of owner-operator and owner-non-operator, along with extensive use of charters. 
The resources particularly around Fort McMurray, as they have developed, the need for aviation has also developed, said Peter Wallis, president of the Van Horne Institute, a transportation think tank. [With] the need to bring workers into the site there are some interesting factors at play. He said the economic and transportation factors of that community demand extensive busing to the sites. It pretty congested just from taking the workers who live in Fort McMurray up to the mine sites every day.
Suncor has seven airplanes in its fleet including four Bombardier Regional Jets (a mix of 90- and 50-seaters) and two corporate jets; all of which are maintained by their in-house program. Charters are frequently employed as well. 
It a big advantage. Having our own fleet means we can manage every aspect of the aircraft from maintenance to operations to get people to and from work safely, said Bill Grainger, Suncor director of transportation. We have rigorous procedures and security measures in place to ensure the safety of our passengers and crew.
Grainger said Suncor flies over 400 hours per month on its own fleet and supplements that with charters. Its aviation service has grown with the oil sands operations. In the past six years, the number of passengers we move has increased from 800 per month to more than 25,000 per month, said Grainger. During a recent turnaround, we transported 32,000 people. The company mostly flies in and out of four primary airports: Calgary, Edmonton, Fort McMurray and Firebag. The latter was purpose-built by Suncor to service its namesake oil sands operation. Further afield, the company aircraft often serve Suncor overseas operations, including the UK and North Africa. 
Grainger reckons the arrangement is a good one for Suncor. We have a lot more options with our own fleet, he said. We’re better able to manage costs, move employees safely and efficiently, and provide the flexibility to respond to changing business needs. It a model that meets Suncor oil sands business needs today, and will support our growth tomorrow. 
Cenovus Energy, another large oil sands developer, also chooses to operate its own fleet. The company has six on its roster: One Sovereign, one King Air 350, two Beech 1900Ds and two Dash 8s, said Monica Thisted, the company lead, travel logistics. The Sovereign is usually reserved for executive travel, while the remaining five are used to transport our workers to our operations in northern Alberta. She said Cenovus operates about 30 flights per week, using a mix of private and public airstrips. The airstrip that services our Pelican Lake operations is owned by Cenovus. For our Christina Lake travel, we use the Leismer airstrip, which is operated by Statoil, and for Foster Creek, we fly into Bonnyville which is a municipal airstrip.
Syncrude, the largest oil sands operator, also has its own airplane fleet but it much smaller because the company is Fort McMurray-based. The vast majority of its workers and executives live in the community. So Syncrude gets by with two Cessna Citation V Encore jets configured in nine-passenger seating arrangements.
We do have a smaller contingent that lives in Calgary and Edmonton, said Robin Borse, Syncrude aviation manager and chief pilot. So, on a daily basis we would have people at Fort McMurray that need to get to meetings in Edmonton and Calgary [where Syncrude operates a research facility]. And conversely, we have people in Edmonton and Calgary that need to get up to Fort McMurray. We can do that on a basis where they can leave in the morning and are back home on the same day.
But they do rack up the hours. Ours are the most highly utilized Cessna Citations in the world, said Borse. We won the highest utilization award five times in total. We typically put about 1,200 hours of [annual] flight time on each aircraft. So in total we are flying somewhere around 2,400 hours per year. 
Like Suncor and Cenovus, Syncrude has its own airstrip. Syncrude has a 5,500-foot airstrip based right at our oilsands plant, said Borse. The flight department itself is based at Fort McMurray Airport, so we use the airstrip at our oilsands site primarily as a pickup and drop-off area. It saves significant man-hours. If we are able to get someone from Calgary directly up to the plant site that saves anywhere from 30 to 45 minutes [each way] driving on the highway. 
And as with others, Syncrude uses charters for particular applications. We do use charters for our fly-in, fly-out program at Fort Chipewyan aboriginal community, a couple of hundred miles north of Fort McMurray, said Borse.
For the charter companies, the oil and gas industry provides a sizeable chunk of their business. Sunwest Aviation is one of the largest charter operations in Western Canada. We are going to fly a total of about 18,000 hours this year, said Ian Darnley, director of business development at Sunwest. I would say probably half maybe two thirds of that is directly related to oil patch flying.
Charter companies like Sunwest manage and operate corporate aircraft for client owners as well as owning their own fleet. We operate about 45 aircraft, said Darnley. About 23 of those are under management and the rest we own. But they are all operated the same; they are all available commercially. The managed aircraft are first of all available for the owners, but they’re also available for other companies that don’t own aircraft.
The charters also enjoy the use of the private airstrips. There a large range of airports available, said Darnley. the high end you’ve got private airfields that have 7,000-foot paved runways with full instrument approaches, on site de-icing, full services, emergency response; the whole bit. And then you’ve got your 3,000-foot gravel strips that you’re going into with smaller aircraft. And everything in between.
A peculiarity of the oil patch aviation business is its cyclicality. Darnley said the vast majority of the activity falls between Tuesday and Thursday of every week. That what we call aviation oil patch syndrome’ where all the companies are moving people in the middle of the week, so there is a tremendous amount of activity between Tuesday and Thursday and not so much between Friday and Monday. He said that limits the amount of utilization charters can put on a single aircraft. To meet the increased demand you have to add aircraft because the oil companies cannot very easily adjust their people-moving schedules; they have to move people in and out on rotation on certain days and are limited by that. As a result, the most a typical oil patch aircraft might fly is maybe only 700 or 800 hours a year, whereas a typical, say, Dash 8 at an airline might fly 2,000 or 2,500 per year.
It not all oil sands-related. The booming natural gas shale fields of northeastern British Columbia, like Montney and Horn River, are opening up. We fly there a lot, said Darnley. The gas side of things is a bit more depressed than the oil sands right now, but there is still a lot of activity up there and there going to be more with all these large multinationals. He lists Total Petroleum, Imperial Oil, and Chinese companies that are active there. And all kinds of Canadian companies, too, that are either starting up or adding to what they currently have. So the projections are huge; there may be a few bumps along the way, but the trend is certainly up and we are making plans to serve that.
North Cariboo Air, another large charter operator, is based in Fort St. John in northeastern B.C. Canadian Skies asked how many of the company fleet hours are related to the oil patch.
Including oil executives and worker transport, I would say 90 per cent, said Hart Mailandt, North Cariboo director of business development. And he noted how economics influences oil and gas company usage it not as closely tied to oil prices as one might imagine. We are sort of isolated from the price of oil because we are so ingrained in the multinationals. Once they commit the capital to a project, the logistics go along with them. Of course, if the price of oil is low, people don’t start as many projects; but they certainly don’t quit the ones they’ve started.
But wouldn’t it be different for natural gas developments when gas prices are as low as they are now? Perhaps, but it not the same case in northeastern B.C., where the gas is eventually expected to be sold in liquefied form to overseas markets. Gas is a slightly different function than oil, said Mailandt. some point with the price of gas, it is predicted we will see less drilling activity. However, that being said, that [northeastern B.C.] gas is going to go out to the coast. All the activity there and at Kitimat [site of several proposed liquefied natural gas plants] will drive some of that as well.
Newer charters are stepping in, too. Calgary-based Enerjet operates two 737s. Since the company first flight in 2008, a significant percentage of our revenues come from workforce transportation, the majority in Alberta, said Darcy Morgan, vice president. The company provides a very professional airline approach, he added.
The Canadian oil patch isn’t all out west. St. John, N.L.-based Cougar Helicopters has been providing helicopter support services on Canada east coast for almost 30 years, and supported the country first offshore oil production facility. Incorporated in 1984 in Nova Scotia, Cougar commenced operations shuttling passengers between the airport and downtown Halifax, said the company media spokesperson, Candace Moakler. Cougar entered the offshore oil and gas industry in 1990 with a support contract in Gijon, Spain; and later that same year, returned to Nova Scotia to begin flying for the oil industry in Atlantic Canada.  Operations began off the coast of Newfoundland and Labrador in 1995. Today, Cougar operates its fleet of Sikorsky S-92 helicopters for the offshore oil and gas industry from its heliport at the St. John Airport, providing a diverse range of services for its oil and gas customers, said Moakler, including passenger movements, search and rescue, heli-deck surveys, offshore aerial construction, flight dispatching and asset tracking.
Helicopters are active in the west, too. Phoenix Heli-Flight, for example, operates a fleet of single- and multi-engine Eurocopters from its Fort McMurray base. For the oil and gas sector, its tours, VIP transport, and environmental monitoring for federal and provincial governments and for the oil companies themselves, said Paul Spring, Phoenix president. To that list, he added aerial survey, airborne seismic and vertical construction work. 
Spring sees a healthy increased demand for helicopter services because over half of oil sands production results from using steam assisted gravity drainage (SAGD), which is subsurface. Which for us is good, because we’re now flying further and further away from home; there is no road access, he said.
Indeed, growth continues across the country. The industry has evolved from operating Piper Navajos 10 or 15 years ago, to King Airs and now to Dash 8s, so it a natural evolution of things, observes Sunwest Darnley.
It not just aircraft size that growing, but activity. I think it going to intensify, no doubt, said the CBAA Barone. Canada has always exploited resources and the growth of emerging markets like India is going to drive that resource industry.
Graham Chandler is a Calgary-based freelance writer with specialties in energy and aviation. His work appears regularly in several oil and gas publications as well as international magazines such as Saudi Aramco World and Air & Space/Smithsonian. Along with degrees in physics, business and archaeology, he is an engineering graduate of the U.S. Naval Test Pilot School.

Notice a spelling mistake or typo?

Click on the button below to send an email to our team and we will get to it as soon as possible.

Report an error or typo

Have a story idea you would like to suggest?

Click on the button below to send an email to our team and we will get to it as soon as possible.

Suggest a story

Leave a comment

Your email address will not be published. Required fields are marked *