While the oil sands business remains challenging because of low oil prices, business conditions are improving thanks to lower costs, more productive labour and hungrier service providers, developers said at an investment conference Wednesday.

“The big change we have seen as an operator is that (staff) turnover is way down,” said Christopher Slubicki, CEO of OPTI Canada Inc., a partner in the Long Lake oil sands project, which is ramping up production at its recently completed first phase.

“We have our people. We are keeping our people. So, our productivity and our performance are improving with the workforce we have, which is much more constant compared to the turnover we had during the construction phase, when everybody was building,” Mr. Slubicki said on the sidelines of a conference on unconventional oil organized by TD Newcrest.

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Unlimited overtime pay was just one of the many perks John Halbauer enjoyed as a welder during Alberta’s super-sized energy boom.

That’s disappeared, along with 11 of the 25-year-old’s 13 co-workers who got laid-off in January. “I was worried. I didn’t know if I was going to have to move back home or what,” the Kimberley, B.C., native said.

His employer, Harley’s Welding Inc., is located in Nisku, an industrial park south of Edmonton that caters to the province’s notoriously unpredictable oil and gas industry. Most companies were hit hard when the global economic crisis and plummeting energy prices side-swiped Alberta late last year.

But in recent weeks, Mr. Halbauer and many others in the province have noticed that the economy is slowly improving, especially in the northern half of Alberta.

“We are almost really busy. Work is rolling in,” Mr. Halbauer said.

Indeed, a run-up in oil prices and recent news that two oil sands projects, including Imperial Oil Ltd.’s $8-billion Kearl mine outside Fort McMurray, are going ahead has buoyed many.

But the optimism is guarded, and no one is predicting another unprecedented boom for Alberta, once the country’s hottest economy.

Earlier this year, Statistics Canada estimated that oil-sands spending will drop to $13.2-billion in 2009, down more than 30 per cent from last year. Billions worth of capital projects have either been scrapped or put on hold.

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While no one seems to be looking, the oil sands landscape is poised to change once again as global oil majors take steps to stake out even bigger holdings.

But in contrast to the last wave of foreign takeovers, made at hefty premiums and sometimes for marginal properties, multi-nationals including Paris-based Total SA, London-based BP PLC and Irving, Tex.-based Exxon Mobil Corp. are hunting for top-drawer properties at today’s cheap stock prices or taking advantage of the sector’s downturn to bolster their presence.

As one investment banker put it: “If you are a major, this is a once-in-a-generation opportunity to build a huge position.”

Why now? Oil majors remain financially healthy even in today’s depressed oil-price environment; they’ve been in the business long enough to know that oil prices are cyclical and that the current downturn won’t last; those that missed acquisition opportunities in the past see the current downturn as a re-entry point at low prices; they see access to new reserves globally as a challenge; they have refineries in the United States that need feedstock; there are plenty of buying opportunities that were not there when oil prices were high.