The Canadian petroleum industry is taking the first steps to recovery from recession as a result of stable oil prices, strong gas sales, and cost and royalty cuts.
The assessment comes from the Canadian Association of Petroleum Producers (CAPP), major voice of the country's industry. CAPP is the result of merger of the Canadian Petroleum Association and Independent Petroleum Association of Canada (OGJ, Oct. 5, p. 42).
CAPP estimated drilling activity in western Canada could increase to 5,000 wells in 1993, up about 19% from an expected 4,200 wells this year.
Association Pres. Gerry Protti noted recent royalty cuts by the Alberta government (OGJ, Oct. 26, P. 34). But he said they are not a cure-all.
CAPP said the estimated royalty reductions of about $170 million (Canadian)/year will increase industry's cash flow by about 3%.
The association said the Canadian petroleum industry would be in worse shape without extensive restructuring that has cut operating costs and eliminated about 14,000 jobs since 1988.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
