Doyon, Limited: Native Resources
Energy Executive Spotlight
Written by Eric Slack   
Tuesday, 01 April 2008
Doyon, Limited: Native Resources - Energy Executive - RedCoat Publishing
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Alaska and oil exploration have been in the same sentence a lot during the last decade. Whether it was environmentalists opposed to drilling or supporters talking about American dependence on foreign oil, everyone had an opinion. But in all that chatter, the voices of Native Alaskan corporations with a vested interest in environmental preservation and oil and gas exploration were somehow drowned out. For Doyon, Limited and its drilling operations, the time has come to be heard.

Aaron Schutt, senior VP - Doyon, Limited: Native Resources - Energy Executive - RedCoat Publishing
Aaron Schutt, senior VP
“We have a desire to be involved with exploration programs on our own lands and on adjacent state-leased lands,” said Aaron Schutt, Doyon’s senior vice president. “Through the growth of Native Alaskan businesses we are making major contributions to the economy, and we genuinely care about the state and are committed to being here long-term.”

Building tradition
Congress established Doyon in 1971 as one of 13 regional native corporations under the terms of the Alaska Native Claims Settlement Act. It owns 12.5 million acres of land scattered about the traditional villages in the interior of the state. Doyon’s number of shareholders has grown to about 16,000, mostly ethnic Native Alaskan, Athabascan Indians, and some Eskimo groups. Last year the company paid more than $23 million in wages to its shareholders.

Governed by a 13-member board, one of the first things the organization did was lock up lands with potential natural resource value, whether it was oil and gas or gold and other base metals. Today the company includes seven subsidiaries—Doyon Tourism, Doyon Drilling, Doyon Universal Services, Doyon Properties, Doyon Lands and Natural Resources, Doyon Emerald, and the Doyon Government Group. The company leverages each of its subsidiaries’ strengths to benefit the group as a whole with its core business in the oilfield services sector.

Doyon made a name for itself in the industry through expertise earned in some of the most difficult terrain and weather conditions in the world. This required the company to become pioneers in American Arctic drilling. The company led the way in the development of drilling rigs capable of standing up to the harsh conditions. In some cases, road surfaces were bad and some areas could only be reached by driving tractor-trailers long distances over ice roads. With innovations in self-propelled rigs and multi-component rigs that could be broken down and moved efficiently, Doyon led the way forward into exploration of the frozen tundra.

Equipment on the rigs also required investments to make them more precise and efficient. Doyon made many advances out on the oil fields to make better use of capital equipment and expensive labor. Along with digital controls and improvements to power supply systems, the company also experienced the benefit of safety advances. As of this year, two of Doyon’s rigs have more than six years without a lost-time accident, while two are at two years without a recordable incident.

Doyon also invested in technology to meet tight environmental regulations, all the way down to minor things like an alarm on diesel tanks to ensure they aren’t overfilled. All of these achievements explain why Doyon is a partner of choice for some of the largest and most influential companies in the industry.

“All of our drilling to date has been on behalf of major oil producers and some larger independents,” said Schutt. “We are kicking off a new build for BP in the next few months, a technologically advanced rig incorporating best practices, equipment, and designs from both our and BP’s experience.”

Act locally
Throughout its efforts to use its expertise to establish connections in the industry, Doyon always remained focused on environmental consciousness. The reason for that is fairly obvious. This is Doyon’s backyard. Schutt said the company holds itself to a higher standard than state and federal regulations require. He also indicated that minimizing the company’s impact on the environment through procedures and protocols to strictly monitor environmental management and health safety systems helped bring the issue to the forefront.

“That’s one reason not too many environmental groups oppose programs in existing fields. They are more active in opposing developments outside of those fields,” he said. “That includes areas on our own lands we’re trying to start exploring seriously. Up until now, all the drilling we’ve been involved with has been on public land with state or federal leases.”

The other connection to the area for Doyon is through the native people. Doyon Drilling’s employee pool is generally 40% to 45% Native Alaskan, with multiple generations involved from the top to the bottom of the Doyon pyramid. The company offers internal training programs and also partners with the University of Alaska to train its own shareholders to be proficient workers in an industry hit hard by a workforce shortage. Still, Schutt feels Doyon can do better.

“In the eyes of our competitors and customers, we’ve had great success, but we’re never satisfied,” he said. “But with all the difficulty finding and keeping people because of heavy activity in the industry worldwide, we’re can build relationships with our shareholders because they know we’re not just another company.”

With plans to begin seismic exploration of large pieces of its own land in areas like the Yukon Flats in the next few years, one challenge Doyon could face is the availability of its own rigs. With Doyon drill rigs under long-term contracts with companies like BP and Conoco-Phillips, the company needs to plan ahead to have Doyon equipment involved in its own projects. But Schutt said that is a difficulty faced by every Alaskan operator and one he is confident the company will overcome when the time is right to explore Doyon lands. After all, this is the company’s ancestral home, one it plans to nurture and explore for a very long time.
 
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