Drilling forecast calls for 14% rebound in 2021 from depths of 2020 activity

The organization that represents Canadian drilling contractors is forecasting a 14 per cent increase in the number of oil and gas wells to be drilled in Canada in 2021 compared with the historic lows this year.

The Canadian Association of Oilwell Drilling Contractors says it expects 3,771 wells to be drilled next year, up 475 from the projected total of 3,296 in 2020.

The forecast is more optimistic than one made three weeks ago by the Petroleum Services Association of Canada calling for a total of 2,600 wells next year, down 8.8 per cent from an expected 50-year low total of 2,850 wells in the current year. The two organizations use different methods to count wells.

Read more: Drilling forecast calls for even fewer Canadian oil and gas wells in ‘bleak’ 2021

The CAODC forecasts that the Canadian drilling fleet will shrink by 27 rigs in 2021 to 478 after remaining relatively stable in 2020. It notes that CAODC drilling contractors had work for an average of only 17 rigs in June.

Story continues below advertisement

CEO Mark Scholz says the industry’s short-term challenges are expected to continue in 2021 thanks to lower world oil demand because of the COVID-19 pandemic.

Read more: COVID-19, low oil prices leads to dramatic drop in demand for power in Alberta

But he adds its longer term prospects are rising on early signs of an energy industry recovery and government programs to speed oilfield cleanups and well reclamations.

“The prospects for an effective COVID-19 vaccine are promising, but the impact of the pandemic on energy demand in 2021 and access to capital for our members and their customers remain a challenge,” Scholz said.

“Although the industry’s short-term challenges endure, we continue to be bullish in the medium and long-term as the world continues to demand Canadian energy resources.”

© 2020 The Canadian Press

View original article here Source