Canada—Industrial Baseline Study

The Newfoundland and Labrador Oil and Gas Industries Association commissioned DAI’s Sustainable Business Group (SBG) to conduct a local content forecasting study in Newfoundland and Labrador. The province has an official vision—Advance 2030—for the oil and gas development, including production markers and additional discoveries. The study’s objective was to assess the local supply chains’ ability to compete for and execute contracts for offshore oil and gas projects anticipated under Advance 2030. In addition to assessing the capabilities of the local supply chains, the study was designed to:

• Quantitatively forecast baseline and maximum amounts of economic value add, and fulltime-equivalent employment captured over time by each local supply chain;
• Assess workforce skills across a range of employment categories;
• Determine which oil and gas supply chains can, could, or cannot be sourced locally; and
• Produce a gap analysis that informs Noia’s strategies for maximizing socio-economic investment and benefits, identifies key workforce and supply chain risks; and prioritizes local content opportunities based on existing and projected local capacity.

Over 10 months, SBG created a cost decomposition of offshore oil and gas installation and operations based on the projected growth in the region according to Advance 2030. This was used to forecast potential economic benefits and job creation in the region using SBG’s Local Content Optimization Model. Expert interviews were conducted from members of the local supply chains to verify and refine the model, as well as identify barriers to operating in the region.

The final report and presentation included recommendations to the client and other provincial organizations under three themes: advocacy, coordination, and information sharing. Recommendations for the client’s membership focused on increasing the memberships’ competitiveness and resilience to the cyclical nature of the oil and gas industry and, for high and medium potential supply chains, included specific recommendations to support greater capture of the project spend for Advance 2030.