This year is expected to be one of the worst in recorded history for oilwell drilling in Canada.
The Canadian Association of Oilwell Drilling Contractors (CAODC) has revised its 2016 drilling outlook predicting this year will be the worst for drilling activity since 1977.
Projected wells drilled is now forecast to be 3,562 – a drop of 25 per cent from the original forecast of 4,728. Projected operating days dropped 28 per cent from the original forecast. The projected rig count is down 31 per cent. Employment numbers are expected to decrease 69 per cent from 2014 levels.
In a news release, the CAODC said it is concerned government fiscal and regulatory policies will make the situation worse.
“The introduction of new carbon taxes and higher corporate taxes in Alberta, compounded with federal delays on new pipelines and LNG approvals, are creating significant investment uncertainty in Canada,” stated CAODC President Mark Scholz in the news release.
Scholz added if the federal government is serious about strengthening the middle class and creating long-term employment opportunities for Canadians, it needs to approve these projects.
Scholz told News Talk Radio it is difficult to say if the downward trend in drilling will continue into future years. He explained no one has a clear understanding of where the price of oil and natural gas will be in the next year to 18 months.
The CAODC will release its 2017 forecast near the end of November.