The Canadian Association of Oilwell Drilling Contractors (CAODC) announces its revised 2016 Q4 Drilling Forecast:
Projected 2016 wells drilled decreased to 3,562, a 25 per cent decrease from original forecast (4,728). The projected operating days decreased to 40,252, a 28 per cent decrease from original forecast (56,260).
The projected rig count in the fourth quarter is 140, a decrease of 31 per cent from original forecast (204). The projected rig fleet to contract decreased by 87 rigs (758 drilling rigs to 671 drilling rigs).
There was also a 69 per cent decrease in employment from 2014 levels (-34,560 jobs).
In its latest drilling activity update, CAODC draws attention to the difficult challenges facing the oil and gas industry. Mark Scholz, CAODC president, emphasizes the depth of the current downturn.
“The oil and gas services industry is facing the most difficult economic time in a generation. In fact, 2016 will be the worst year in our recorded drilling activity history (1977),” said Scholz.
CAODC is concerned about federal government fiscal and regulatory policies making a bad situation worse for the country.
“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. Although government does not have control over the price of oil, it has influence in ensuring Canada is an investment destination of choice once the industry recovers.”
By the end of the year, the Canadian Association of Oilwell Drilling Contractors will know the fate of a number of critical pipeline projects and whether LNG exports will become a reality in British Columbia. The ability to export Canada’s resources has a dramatic impact on our national economy.
“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,” concludes Scholz.
CAODC will be releasing its 2017 Forecast on November 22, 2016
