Canadian oil and natural gas drilling will accelerate this year to double the sluggish pace inflicted in 2020 by the Covid-19 virus pandemic and resulting global economic slump, according to oilfield service (OFS) contractors.
The 2022 well count is expected to rebound to 6,902, up 48% from 5,648 in 2021 and 110% from the 2020 low of 3,293, the Canadian Association of Energy Contractors (CAOEC) said in a new report.
“War, supply chain challenges and surging inflation are waking up millions of people in Canada and around the world to the importance of stable, affordable and responsibly produced energy. Canada can meet those needs,” said President Mark Scholz.
The OFS activity forecast relies on projections that market prices will sustain annual averages of US$97.96/bbl for oil and $2.50/MMBtu at natural gas trading points in Alberta and British Columbia.
Allowing for seasonal variations, the CAOEC is forecasting a 2022 annual average rig count of 170. The active fleet was 180 rigs in the first quarter. It is expected to dip to 115 during 2Q2022, before rebounding to 185 in 3Q2022 and 200 in the final three months of this year.
The latest outlook takes into account activity limits imposed by “headwinds,” including labor shortages, potential disruptions of supplies such as imported drilling pipe and rising costs, said the CAOEC.
The accelerated field activity forecast included a stronger employment outlook as well. CAOEC said OFS jobs and among subcontractor services are projected to increase to 37,400 in 2022, from 26,296 in 2021 and more than double the 2020 low of 17,911.
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