Some companies in Alberta's oilpatch are increasingly focusing their attention on Kazakhstan.

The former Soviet republic, which borders five countries including China and Russia, is expected to play a larger role in the world's growing thirst for oil in the coming years.

Excluding Russia, Kazakhstan is the largest of the former Soviet republics in actual territory, but it is its vast fossil fuel reserves that are thrusting it into the spotlight.

"In proven reserves, they are considered the fourth largest in the world," says Derwin Herrera, executive vice-president of client services for TradeAid Corp.

Jack Dagley, Business Edge
TradeAid's Derwin Herrera, left, and PowerComm's Wayne Rutherford check out some of PowerComm's inventory.

"Pretty well every major oil and gas producer is there."

TradeAid is an Edmonton-based company that specializes in helping Canadian firms looking to enter the foreign marketplace.

It has assisted several Alberta-based oil-service companies to create joint venture operations in central Asia, specifically Kazakhstan, and is working with others in finding cost-effective methods for international expansion.

"The company did just under $1 million in its first year, and what it wants to do is build on that base - in doing so, it is opening offices in Calgary and in Ottawa," says TradeAid president and CEO Ian Hogg, who joined the company in January to help it through its next level of growth.

The new Ottawa office will allow the company better access to the federal government, which is responsible for Canadian foreign trade and in turn, access to more support for international ventures.

The Calgary office will bring it closer to southern Alberta clients and to the home of many of the oil producers' headquarters.

Two companies TradeAid has already assisted are Edmonton's PowerComm Inc. and Calgary's Chapman Petroleum Engineering Ltd.

PowerComm, a medium-sized industrial electrical instrumentation and valve-service company, was already looking into foreign expansion when it was approached by TradeAid, says PowerComm general manager Wayne Rutherford.

"Our industry is a very tight margin business - the marketplace in Alberta - and from 1996 to 2000 we did international work in the U.S. and we found the margins were better there," says Rutherford, whose company had just completed a trade mission to Brazil in November 2004.

"There was a lot of promotion in Calgary for Kazakhstan. We knew about it, but hadn't gone there," adds Rutherford. "We may have considered Kazakhstan, but definitely TradeAid helped moved us forward quicker than we would have otherwise."

TradeAid introduced PowerComm to Kazakhstan's oil and gas market and enabled a joint venture with a Kazakh partner.

PowerComm's goal is to bring Kazakhs to Canada and train them here to better adapt to oil and gas work in Kazakhstan. The company also wants to teach them English, as the language is important when working in oil and gas trades, adds Rutherford.

"They don't have great trades training. They do have some good tradesmen, but most of the training is from outside of Kazakhstan," notes Rutherford.

For Chapman Petroleum Engineering, a mid-size petroleum engineering consulting firm, Kazakhstan wasn't even on their radar screen.

"It wasn't on my own initiative, it was on the initiative of TradeAid," says company president Charlie Chapman.

"We were given the story of the opportunity from them and we went on a business exploration trip with the TradeAid personnel. It just seemed like an opportunity that was worthy of pursuing."

As a result, Chapman has undertaken a joint venture with Caspian Energy Research LLP; their company is called Caspian Integrated Technologies LLP.

"Kazakhstan is one of the most rapidly growing petroleum resource bases in the world. It's kind of a like a last frontier, like Alberta in 1960. They have huge resources and a need for our knowledge and expertise," says Chapman. "Contrary to (some) opinions, Kazakhstan is a very nice country.

"The people are wonderful and we haven't encountered any unpleasant experiences to date. Most business is done in the Russian language, but we're capable of finding translators."

Chapman also says he's proud to contribute to the technological development of a country that's on the verge of becoming an important nation.

Rutherford, meanwhile, also notes that the potential in Kazakhstan is strong.

"The Kazakhstan market is huge right now. There's a ton of opportunities for Canadian companies," he says.

Gary Wetsch, one of the founders of TradeAid, says it does more than just introduce a company to an opportunity in a foreign country, but helps them from the beginning to the end.

TradeAid finds the work first and then finds an Alberta company interested in and capable of doing the job.

TradeAid has focused on Kazakhstan because it received various messages that the country had positioned itself to welcome Western oil-service companies, adds Wetsch.

"While there still remains the challenge of dealing in another culture, Kazakhstan continues to demonstrate a proactive attitude to facilitate Western companies," he says.

But while Kazakhstan offers a strong developing oil economy, TradeAid also understands that it has to look at other geographic areas as well and says it will be doing that as it grows.

(Laura Severs can be reached at laura@businessedge.ca)