Touching the Barrel

How Gibsons’s integrated, end-to-end service model grew the 60-year-old company into a midstream energy giant

In 1953, Gibsons sold its first shipment of crude oil on behalf of Anglo American Oils Ltd. to the British American Oil Co. Ltd. Over the next six decades, through the construction or acquisition of terminals, pipelines, trucking, propane, and environmental services assets that span North America, the company emerged as a major player in the independent midstream energy industry in Canada.

The key to Gibsons’s growth and market competitiveness is its deftness in integrating multiple services across the value chain, notes Richard Hannah, vice president of information services. “Lots of companies provide these same services—transportation, storage, processing, and distribution of crude oil, condensate, and refined products,” he says. “What differentiates us is our entrepreneurial approach to solving our customers’ problems by offering them an integrated system. We try to touch the barrel multiple times, and we make revenue each time we touch the barrel.”

Richard Hannah, vice president of information services, brings 30 years of IT experience to his role at Gibsons. He also holds a dual background in business and tech, giving him a valuable vantage point in micro and macro issues.
Richard Hannah, vice president of information services, brings 30 years of IT experience to his role at Gibsons. He also holds a dual background in business and tech, giving him a valuable vantage point in micro and macro issues. Photo by FreshCut HD Creative

130 million barrels

The first touch is trucking: a fleet of roughly 2,600 trailers and 1,400 tractors transported more than 130 million barrels of oil equivalents throughout Canada and the United States in 2014, giving the Gibsons logo—a gold-coloured letter G that resembles a stylized highway—visibility in major retail markets.

70 pipeline-injection stations

Movement of crude oil and its derivatives through the value chain takes more than trucks; it demands an established infrastructure and a strategic base of operations from which to sell oil-and-gas commodities to buyers on the global market. While all five of Gibsons’s business segments—truck transportation, terminals and pipelines, environmental services, processing and distribution, and marketing—have helped strengthen its position in North America’s midstream energy sector, the major growth area in the last four years has been terminals and pipelines.

The strategic location of Gibsons’s terminals, particularly the Edmonton and Hardisty hubs in Alberta, along with more than 70 pipeline-injection stations, give the company its competitive advantage. “Every major pipeline in Canada goes through Hardisty, and the majority of all oil exports go through Edmonton and Hardisty—where we own and operate assets,” Hannah explains. “Being in strategic locations with underdeveloped land has strengthened our ability to grow.”

6.5 million barrels of storage

While fortifying its stronghold in Alberta, Gibsons continues to expand the scale of its operations throughout North America. Through the 2010 acquisition of Taylor Logistics, Gibsons extended its geographic reach and service arm into key hydrocarbon producing regions throughout the United States and significantly expanded the scale of operations at the Hardisty terminal. “We have 6.5 million barrels of storage in Hardisty and Edmonton, and another 3.2 million slated for construction in the next couple years,” Hannah says.

$445 million OMNI acquisition

As the company has grown, Gibsons has pushed deeper into the environmental sector. In October 2012, Gibsons acquired OMNI Energy Services Corp., in Carencro, Louisiana, for $445 million—the largest purchase to date for the company. This purchase provides Gibsons with a sizable footprint throughout the active oil-based growth basins in the United States. Water treatment and disposal of drilling mud and fluid by-products are not just new add-on services, Hannah says, but a part of what it means to provide end-to-end services in the modern oil-and-gas industry.

1 incredible IT challenge

For a company with some 2,500 employees and 225 operating locations, providing end-to-end services also means integrating dissimilar software packages and data models across business segments. That’s part of the reason why Hannah, an information-technology veteran of 30 years, was pegged for his role. “The most important thing is that we’re here to deliver a service to the business units of Gibsons,” Hannah says. “Everything we do is to support the operational and growth goals of company.”

To begin with, an overhaul of the business management software that Gibsons uses leads the changes. In June 2015, partnering with key IT-service companies such as Western Computer, Frequency Foundry, and Long View Systems, Gibsons introduced across its business segments a suite of Microsoft products, including Dynamics AX, Dynamics CRM, Office 365, BizTalk, and Power BI. “Part of the core strategy is to consolidate to one vendor as much as we can,” Hannah says.

Another key initiative is to cut Gibsons’s IT costs by consolidating server storage and network operations. Five data centres will be eliminated by 2016. Gibsons will transfer operations to two off-site locations in North America, which will be managed, separately, by Rogers Communications and Digital Realty Trust.

Finally, a new information-management system, Microsoft SharePoint, which went live in January 2015, is giving employees from different business segments a single portal from which to access and share information. “We want to provide an anywhere, anytime, any-device infrastructure geared less for where you are, the time of day, or the device, and more for how you can get the information required to do your job,” Hannah says. “We’ve embraced the cloud, if you will.”