PROCESSWEST Magazine Online

Oil sands procurement from Indigenous supplies now $2.4 billion

February 18, 2021   Don Horne




A survey by the Canadian Association of Petroleum Producers (CAPP) of oil sands producers shows the increasing role of Indigenous suppliers to the industry. In 2019, about $2.4 billion was spent on procurement from Indigenous businesses; 16 per cent higher than in 2018 and 53 per cent higher than in 2017.

“The oil and natural gas industry is continuously working to enhance opportunities for reconciliation, including business partnerships that generate sustained economic, social and community benefits for Indigenous communities through resource development,” says Tim McMillan, president and CEO of CAPP. “The industry is proud to support education and training initiatives and strives to engage with local communities. Indigenous employment in oil and gas is critical, contributing skills and local knowledge that are essential to project success and continued operations.”

The number of Indigenous suppliers has also grown from 263 in 2017 to 275 in 2019, with cumulative procurement spending in the three-year period totalling about $5.9 billion. The oil sands companies that participated in the survey are responsible for more than 95 per cent of Canadian oil sands production.

Indigenous supply chain businesses contribute to oil sands operations in a variety of areas including construction, camps and catering, equipment services, transportation, environmental, drilling, engineering services, and retail among others.

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In addition, the survey shows oil sands producers are continuing their commitment and engagement in the communities where they operate, increasing the total amount of money put into community investment, consultation funding and other initiatives in Indigenous communities. The total for these activities reached $64.2 million in 2019, compared to $58 million in 2018, and $41.8 million in 2017.

Community investment can include things such as education initiatives for Indigenous communities, training programs, physical infrastructure and cultural program funding specific to local communities. Consultation funding applies to ongoing operations in an Indigenous community, but also includes project specific consultation, site visits, technical reviews, and funding for studies and agreement negotiations.

As Indigenous businesses grow their participation in resource development, Indigenous people are a growing proportion of oil and natural gas employment, making up 7.4 per cent of the industry’s workforce in 2019 (up from 4.8 per cent in 2018).


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