Increased drilling activity in 2022, says Petroleum Association

Oil and gas drilling in Canada is projected to increase by 16% in 2022. predict From the Canadian Petroleum Service Association (PSAC).

PSAC President and CEO said: Gurpreet Rail.

Mr Rail said that imbalances in the global market are pushing up commodity prices and PSAC expects drilling activity to inevitably increase.

Overall, PSAC expects 5,400 new wells to be drilled in Canada next year, most of which are in Alberta, where the number of wells will increase by 450 to a total of 3,125. Saskatchewan, Canada’s second largest oil producer, is expected to add 198 to 1,495 new wells next year.

PSAC also raised its forecast for 2021 due to improved activity in the energy sector, eventually forecasting a total of 4,650 wells annually.

PSAC estimates that the Alberta Energy Company (AECO) will have an average natural gas price of C $ 3.60 per 1,000 cubic feet and crude oil prices of $ 67 per barrel based on West Texas Intermediate (WTI) standards, based on 2021 forecasts. The Canadian dollar averaged $ 0.80. Of US dollars. PSAC’s 2022 forecast is that the average price of WTI will be US $ 70 per barrel and the average price of AECO’s natural gas will be $ 4.10 CAD per 1,000 cubic feet.

“Although the outlook for activity is brighter than it was a year ago, exploration and production companies have not deviated from strict capital discipline and continue to prioritize share buybacks, repay debt, increase or issue dividends.” Said Lail.

However, PSAC warned that the oil and gas industry, like other industries in Canada, is facing a “serious labor shortage” that could impact growth next year.

Labor shortage

According to PetroLMI, the industry’s labor market information provider, the unemployment rate for oil and gas field services in Alberta was 3.4% in September this year, compared to 18.1% in September 2020.

Petro LMI Vice President Carol Howes Told the Canadian Press During the COVID-19 pandemic in October, when the industry’s labor pool began to shrink due to falling oil prices in 2014, many workers returned home and are not keen to return home for higher salaries.

“I think many workers consider this to be” OK. ” Production per hour may be a little lower now, but I go home every day and stay close to my family and friends, “says Howes. “They made a conscious choice to work in a lifestyle that is in line with their comfort, even though the overall reward is low.”

At the same time, the Canadian Energy Contractors Association (CAOEC) said the number of direct and indirect jobs in the oil and gas services sector increased by 130% compared to 2020, and a shortage of rig workers threatens industry growth. Said.

“This is an increase in employment for 20,750 people, so the industry is very bullish on the activity,” CAOEC CEO Mark Scholz told the Canadian press. “But the challenge is trying to get up and running very quickly to deal with capacity limitations.”

With files from Canadian Press