Stampede canvas auction kicks off amid political uncertainty and a troubled oil industry
Chuckwagon drivers and sponsors are hoping for the best as clouds of political and energy industry uncertainty gather ahead of the Calgary Stampede canvas auction.
The success of the annual event is considered a bellwether for the Calgary-based oil and gas industry, as many of the sponsors who pay to have their company names on the 36 rigs competing in the 10-day July tribute to cowboy culture are energy industry players.
Champion driver Kurt Bensmiller, who won the chuckwagon derby for the fourth time in five years in 2018, says the calling of an Alberta election on Tuesday creates more uncertainty for an economy battered by recent commodity price volatility and slowing oilfield activity.
The current NDP government introduced controversial oil production curtailments in January and is investing in crude-by-rail capacity to fill a shortfall in export pipeline room.
Bensmiller also took the prize for the highest tarp price of $130,000 last year as a total of $3.2 million was bid at the auction.
“I’m hoping with the economy the way it is, if we stay close to what it was last year or even the average comes up a bit as a whole, the driver group will be pretty excited about that,” he said in an interview with Canadian Press. “I’ve talked to a few (prospective sponsors) and they expressed interest in me so I’m not really on pins and needles.”
The top money bid last year came from Versatile Energy Services, Ltd., a private oilfield services company based in the resort town of Sylvan Lake in central Alberta.
Versatile president Kent Stormoen told Canadian Press he plans to be at the event tonight but declined to make any predictions for results given the province’s current uncertain times.
“The industry still isn’t rolling like we expect it to but (the sponsorship) did help with the exposure of our company,” he said.
“I think there’s a lot of uncertainty with the provincial election coming now and the new federal budget that’s come out.”
Stampede spokeswoman Kristina Barnes said Wednesday the number of bidders who have pre-registered for the auction is at more than 130, a bit behind last year’s pace, while adding many bidders register just before the event.
The record year for overall tarp auction results came in 2012, when bidders pledged just over $4 million — including the highest bid of $300,000 by oilfield services firm Tervita Corp. At the time, oil prices were hovering above US$100 per barrel versus recent prices of around US$60 per barrel.
About 80 per cent of the canvas auction proceeds go to the drivers and the rest is used for prize money, safety and other chuckwagon initiatives.