The Canadian Association of Oilwell Drilling Contractors has slashed its forecast for 2016 oil and gas drilling from the already pessimistic projection it published last November.
“The oil and gas services industry is facing the most difficult economic time in a generation,” CAODC Pres. Mark Scholz said in a statement. “In fact, 2016 will be the worst year in our recorded drilling activity history.”
CAODC records begin in 1977.
The association now projects 3,562 wells drilled this year vs. 4,728 in the earlier forecast, 40,252 operating days vs. 56,260 earlier, and a fourth-quarter rig count of 140 vs. 204 earlier.
It cut its estimate of land rigs for which contracts are expected to 671 from 758.
CAODC expects drilling employment this year to be down 69% (34,560 jobs) from the 2014 level. It earlier expected the decline to be 57% (28,485 jobs).
Scholz said regulations and fiscal policies are aggravating problems of a market depressed by low oil prices.
“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,” he said.
