CAODC: Canadian drilling to stay depressed

Drilling contractors in Canada face another difficult year, predicts the Canadian Association of Oilwell Drilling Contractors.

The trade group expects drilling of 4,905 wells in 2020, up 9 from the depressed total expected this year, while the rig fleet shrinks.

Its forecast follows a pessimistic outlook from the Petroleum Services Association of Canada late last month (OGJ Online, Nov. 1, 2019).

“Following the Canadian federal election in October, the sentiment toward Canadian oil and gas is nearing all-time lows,” CAODC said in a press release. “Since 2017, the industry has lost an estimated $30 billion in foreign capital, and companies continue layoffs and relocation efforts. CAODC members have moved 29 high-spec drilling rigs, several service rigs, and associated personnel to the United States in order to find work and generate cash flow.”

This year has been “extremely difficult,” said CAODC Pres. and Chief Executive Officer Mark Scholz. “The attacks from foreign funded, radical environmental groups and punitive policy measures from our own federal government have caused Canadian oil and gas families to suffer unnecessarily.”

CAODC cited pipeline delays and regulations enacted during the Liberal Party government of Prime Minister Justin Trudeau for the sagging investment in Canadian oil and gas. Trudeau won reelection with a minority Parliament in October and must form a government with non-Liberal support by Dec. 5.

CAODC expects the Canadian rig fleet to decline to 497 units next year from 545 this year and total jobs in 2020 to be unchanged from 2019 at 22,313, down 13,731 from 2018.

It projects operating days of Canadian drilling contractors will increase by 88 from this year’s expected level to 46,599 next year.