7 aboriginal nations come together to form Seven Lakes Oilfield Services, finding a balance between environmental stewardship and business opportunities.
By setting high standards for employee performance and emphasizing on-the-job safety, Seven Lakes Oilfield Services has built a business reputation as strong as the scaffolding its employees erect at oil treatment facilities throughout northeastern Alberta. Along the way, the company has grown into what just might be one of the most unique oilfield contractors in Canada.
Established in 2002, the company — which primarily provides site and infrastructure scaffolding and waste management services — is owned by seven First Nations bands. (First Nations refers to the country’s aboriginal descendants.) Cold Lake First Nations owns 50 percent of the company, and six other bands own equal portions of the remaining stake: Frog Lake, Kehewin, Saddle Lake, Goodfish Lake, Beaver Lake and Heart Lake. Based in Cold Lake, the company is a subsidiary of Primco Dene LP, which is owned by the Cold Lake First Nations band, says John Darr, president and chief executive officer of Seven Lakes since 2011.
About 80 percent of the company’s 250 employees are of aboriginal descent and come from more than 45 First Nations bands and settlements. A board of directors runs the company; it meets once a month and includes representatives from all seven bands, Darr says.
“I don’t know of any other instance across Canada where seven First Nations bands own one company and work well together,” Darr says. “It’s pretty unique. It works because we all share a common goal: employment opportunities for all aboriginal people. We all share that vision. We couldn’t have achieved the success we’ve had without the support of the chiefs and councils of all the Nations.”
Darr acknowledges that some may find it strange that First Nations bands are heavily involved in the oil and gas industry, given the environmental concerns. But he believes that Seven Lakes offers a model for balancing environmental stewardship with business/employment opportunities for struggling First Nations bands.
“Don’t get us wrong — the Nations make sure the lands are being taken care of properly,” Darr says. “That’s still very important to First Nations groups. They work with environmental consultants all the time to be sure that the lands being used are taken care of properly; this is not about raping and pillaging the land. The aboriginal people will still be here long after the oil companies are gone.
“The First Nations understand that the oil industry is an important part of Alberta doing business, and we want to be a part of it,” he continues. “We want to create wealth and opportunities for our people, but we’re still very united in ensuring that the lands are taken care of — we’re very involved in that. And the industry is very respectful and understanding of our history.”
Seven Lakes was formed by James Blackman, the president and chief executive officer of Primco Dene; Eddie Makokis, a former chief of the Saddle Lake band; and Tom Schultz, a former business manager of Pimee Well Servicing Ltd., another oilfield company owned by First Nations bands, Darr says.
Initially, Seven Lakes focused on waste management services. Getting established was a challenge, especially since the company had no credit history, which made it difficult to obtain anything other than high-interest loans to finance the purchase of equipment. “The company bought some old, beat-up garbage trucks,” Darr notes. “We owned a lot of used equipment, so we regularly dealt with maintenance and repair issues. Now most of our vehicles are less than 4 years old, and we have a regular replacement cycle in place.”
Growth came slowly at first. In the early days, the company actually had more board members than employees, Darr recalls. Even when he came on board in 2011, the company employed just 70 people. What spurred the fast growth in the last four years? Industrious, well-trained employees who do quality work, coupled with management that’s always looking for new business opportunities, he says.
“We were building our brand name, which takes a long time to do,” Darr says. The company benefited from government-related programs — similar to minority set-asides in the United States — that opened doors for business. “But ultimately we were judged on what we did after we got inside those doors,” he points out.
A good example is the company’s scaffolding division. When the company started the division several years ago, one drilling company gave Seven Lakes the OK to bring in six employees on a trial run. “We looked at it as an opportunity to shine,” he says. “Now that division employs about 40 people and offers good profit margins. We’re very proud of that. A political arm helped us open that door, but what built us up to 40 people was hardworking employees, good management from leaders in that division and strong safety performance.”
Another factor in the company’s growth: Seven Lakes holds employees to high standards of accountability regarding attendance, behavior and safety. “Those three items make it tough to work for us,” Darr says. “Our standards are high and will remain high. That’s why we’ve been successful.”
LARGE EQUIPMENT INVENTORY
The company’s large fleet of equipment reflects its dramatic growth. The company owns two excavators made by Caterpillar; six wheeled front-end loaders built by Caterpillar and Deere & Co.; 20 skid-steers manufactured by Bobcat (a subsidiary of Doosan Infracore Bobcat Holdings, a wholly owned subsidiary of Doosan Infracore); six tandem-axle dump trucks (Peterbilt chassis); and two water trucks with Freightliner chassis (a brand owned by Daimler Trucks North America), used for dust-control operations and equipped with 4,000-gallon tanks made by Ledwell.
In addition, the company relies on two trucks — a Peterbilt and a Freightliner — for snow plowing and sanding highways (equipped with plows made by Monroe Truck Equipment and sanders from Danco Trailers); 10 roll-off garbage trucks (Peterbilt and Kenworth chassis); two 6-cubic-yard front-load garbage trucks (Peterbilt and Mack chassis); more than 65 1-ton 4 x 4 flatbed trucks (SWS Truck Bodies & Trailers), used to carry scaffolding materials; four tractors — three John Deeres and one made by Kubota Tractor — equipped with mowers for cutting grass along ditches and roads; and nearly three dozen trailers (Double A Trailers).
Seven Lakes also runs more than 70 Ford 1/2-ton 4 x 4 pickup trucks that are used primarily for daily service work and transporting workers to job sites. “We’re unique in that we provide door-to-door transportation for our employees,” Darr says, noting that reliable transportation can be a challenge for many First Nations people. “Part of our business model centers on making sure workers can get to work and home in safe, reliable transportation. It’s a huge expense — we spent $1.4 million on fuel last year. It definitely comes off our bottom line, for sure. Those kinds of costs don’t get absorbed by industry or clients.”
The company also owns about $2.5 million in scaffolding and expects to double that amount by summer 2016, Darr says. “We’ve experienced substantial growth in scaffolding, which reflects our constant search for growth and new opportunities,” he notes.
A solid safety record has also been critical to the company’s fortunes. “Our slogan is, ‘Safety is our tradition,’” Darr says. “At this point, we’ve gone 6 1/2 years without a recordable work-related injury. In this industry, a company’s safety record is the driving force for future work. You can be the fastest contractor out there, but if you have a poor safety performance record, you won’t be out there very long.”
Seven Lakes matches up each new employee with a mentor that does operations and safety training for the first three months. After that, the mentors continue to provide ongoing training out in the field, with the belief that hands-on, day-to-day instruction is more valuable than classroom training, Darr says. To further motivate employees to work safely, the company provides catered dinners on a quarterly basis for divisions with clean safety records. “We believe in celebrating these milestones and acknowledge outstanding safety performance,” he says.
“It’s vital that we maintain our outstanding safety record and continue to build on it,” Darr adds. “The No. 1 priority is keeping our people safe and teaching them that services can be performed safely on a daily basis. All they have to do is follow procedures and avoid taking shortcuts.”
EYEING FUTURE GROWTH
Seven Lakes wants to build on the rapid growth it has achieved during the last four or five years. To do so, company officials are focused on ways to reduce costs to clients and on diversifying the company’s business services by capitalizing on niche markets, Darr says.
“In some areas, we’re doing things that other companies don’t necessarily want to do, like provide general labor for things such as weed picking or painting,” he explains. “We want to focus on smaller services that are a challenge for the industry players, because it can be hard to find companies to perform them. Plus, these opportunities open doors for other work.
“We’re also looking for other opportunities outside the oil industry so that we’re not as dependent on just one industry,” he adds. “That would open up more opportunities in our company because not everyone is a good fit for working in this industry. It’s very demanding with long hours — not everyone is cut out for it. We have lots of workers out there who might not be suited for the oil industry but would be a good fit for other opportunities.”
But above all else, Seven Lakes intends to continue to provide oilfield clients with the best service possible. “We don’t just work for our industry players,” Darr concludes. “We value them as partners, and they do the same to us. It’s a great partnership that has resulted in a win-win relationship.”
Losing workers isn’t always a negative for oilfield contractor
Most companies don’t like it when employees leave to take new jobs. But things are different at Seven Lakes Oilfield Services in Cold Lake, Alberta, one of a handful of Canadian oilfield services companies owned by First Nations bands and organizations.
“If our employees move on to take key roles with other companies, we look at that as a great success,” says John Darr, the company’s president and chief executive officer. “The whole idea behind our company is to create better opportunities and a better way of life for our workers. If we bring our people in and train them, and they later move on to work for a different company — even a competitor — that’s still considered a success for us. That’s one more person out there working and making a difference.”
It’s an unusual attitude, but then again Seven Lakes is not your average oilfield services company. The company was formed to provide better employment opportunities for First Nations people; roughly 80 percent of its 250 employees are of aboriginal descent. Since gainful employment has historically been a challenge for First Nations people, the company tends to provide niche services that don’t require workers with extensive job experience.
In most cases, that means many employees start out as general laborers. As such, turnover at that level is high — sometimes up to 30 percent. To combat this, the company emphasizes early on that general labor can be a stepping-stone to better jobs, such as operating equipment or building scaffolding. “We try to help them understand that the general labor side can be fairly temporary,” Darr says.
To reduce employee turnover, Seven Lakes sets employees on career paths whenever possible. For example, scaffold builders can participate in an apprenticeship program taught by certified trainers. “We run our own apprenticeship program because then we don’t have to send employees away for training or wait for courses to be offered,” Darr explains. “The training comes from the Scaffold and Access Industry Association.”
To become a journeyman scaffolder, an employee must pass four tests and accumulate a certain number of hours of experience — a process that takes about three years. Every time employees pass a test, they receive a pay raise. The program has been successful: Dozens of scaffold builders have achieved journeyman status — a job that pays wages comparable to journeyman plumbers and carpenters, Darr points out.
“Some of them now work in lead positions, such as site managers, or run divisions for us,” he says. “We’ve been very successful in