By Canadian Press

2,600 wells expected

Another “bleak” year on the horizon for oil and gas drilling: PSAC

Oct 29, 2020 | 12:33 PM

CALGARY – The Petroleum Services Association of Canada says it expects another “bleak” year for Canadian oil and gas drilling in 2021.

It says it expects a total of 2,600 wells will be drilled in Canada next year, down from its expected total of 2,850 wells in the current year. Both numbers represent more than 50-year lows for activity.

PSAC cut its 2020 Canadian drilling forecast three times over the past 10 months as oil prices fell early in the year due to global overproduction and then fell again as the COVID-19 pandemic eroded demand for fuel.

The forecast for 2021 is 47 per cent lower than the 4,900 wells drilled in 2019.

It calls for fewer wells to be drilled in Alberta and Saskatchewan but more in British Columbia and about the same number in Manitoba and in Eastern Canada.

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PSAC interim CEO Elizabeth Aquin says the slump in drilling is entering its sixth year and has been “devastating” for oilfield services companies and employees.

“There is little incentive for capital investment by the exploration and production (E&P) companies to support increased activity and production,” said Aquin. “Recovery from COVID-19 remains elusive, holding global demand for oil at bay and balance sheets remain challenged and focused on reducing debt.

“As well, federal Bills such as C-69, C-48, along with policies that focus on climate goals, increasing costs while industry struggles to survive and recover, continue to add uncertainty and negatively influence investment in Canada. “

(The Canadian Press)