Pump jacks pump oil at an Encana well near Standard, Alta., in this file photo.Todd Korol/The Globe and Mail
Paul Ziff, a steady, analytical voice on energy in downtown Calgary, says he has been through enough Alberta recessions and will sit the rest of this one out by retiring at the end of next month.
He has also now overseen a smooth transition in his Calgary office following Ziff Energy Group's acquisition by Munich Re's Solomon Associates in 2013. It has been "a pretty long run" for the 64-year-old.
Mr. Ziff, executive vice-president at Solomon Associates, founded Ziff Energy in the midst of a previous oil price downturn and has advised clients including TransCanada Corp., Royal Dutch Shell PLC, BP PLC and ConocoPhillips through more than three decades of crude price highs and lows.
"It was in the aftermath of the NEP [national energy program]. It was not a good time for starting," he said of his firm's 1982 beginnings, which was followed by an oil price collapse in 1986.
"I decided that I was more interested in working for the industry than for investors. I previously was head of research for one of the Bay Street firms. And I just found dealing with the oil and gas executives considerably more interesting and stimulating."
The affable and soft-spoken Mr. Ziff and his staff have been on the forefront of providing analysis on North American natural gas supplies, pricing and regulatory affairs. His office also advises exploration and production firms around the world on profitability and efficiency benchmarks, allowing them to measure how they stack up against peers in the same oil and natural gas fields.
"For instance, we did the first field-by-field comparison of the deep water in the Gulf of Mexico. That was at the request of a supermajor," Mr. Ziff said.
He said that over the years, he has advised some Canadian firms that their asset base was too spread out, which made it difficult to become the best in any one region or play, and also diluted the focus of the company.
"There have been a number of companies selling assets in the last 12 or 18 months. However, we had suggested these assets be sold five or 10 years ago. Clearly the price would have been better, and there would have been the extra five or 10 years of focus," he said.
Some listened, he said, but others didn't. "There was the thinking that the more barrels, the better."
This downturn, he said, feels a lot like the 1980s with the main difference being that interest rates are low and companies have been able to hang on. "There's not as much carnage on the streets of Calgary."
At the same time, nearly one in 10 workers in the city is unemployed, he said. Canada's oil industry has shifted to cost-intensive bitumen production, the natural gas industry is largely demand-driven – because there are now so many North American resources – and the push to build Canadian liquefied natural gas export facilities has sputtered.
"In this type of business, and going forward, average is not going to cut it," Mr. Ziff said. "You have to be amongst the best. And although every company will say it's the best or the lowest cost, that's simply not the case."