Oil comes back to life in Canada
Two years after the collapse in oil prices forced the oil and gas industry to scale back drilling, the Canadian Association of Oilwell Drilling Contractors (CAODC) is forecasting a year-over-year increase in the number of wells drilled in Canada.
Companies will drill 4,175 wells next year, a 31 percent increase compared to 2016, according to the association. The number is still 63 percent lower than the 11,204 wells drilled in Canada in 2014, but marks a turning point for the industry as oil prices remain below $50 per barrel.
The increased drilling could also mean more jobs, according to CAODC, with the potential of an additional 3,000 direct and indirect jobs.
“The types of rigs that will be in demand in this new environment will be highly specialized to drill manufactured wells,” said Brian Krausert, CEO of Beaver Drilling, in a statement. “The rigs of the future will drill wells faster, more efficiently and with more consistency while reducing risk.”
Saskatchewan beats Alberta for most new wells in 2017
Surprisingly, the province with the highest drilling activity next year will not be Alberta, according to the association. Saskatchewan is expected to edge out Alberta by 40 wells in 2017 for a total of 1,940. Saskatchewan is expected to drill more wells than the traditionally energy-heavy Alberta thanks to a shallower basin, operational changes and a more attractive environment for investors, CBC reports.
“Saskatchewan will outperform Alberta in wells drilled for the first time in the 36 years I’ve been in the industry and probably the first time ever,” Petroleum Service Association of Canada (PSAC) President Mark Salkeld said. “It’s a drive to get the wells drilled, completed, producing and getting cash. It’s a hole-making factory that they’ve got going on down there.”
While Saskatchewan will account for the largest number of new wells drilled, Alberta will still lead Canada in total production because of the oilsands.
PSAC based its forecast on an average oil price of US$52 per barrel.
By Oil & Gas 360