OTTAWA: Canadian oil and gas drilling activity will climb 5% in 2018 as a gradual uptick in crude prices gives rise to cautious optimism among producers, an industry body forecast on Oct. 31. The Petroleum Services Association of Canada (PSAC) expects energy firms to drill 7,900 wells in 2018, up from 7,550 wells in 2017. The biggest increase in activity will be in Canada’s main crude oil and gas-producing province of Alberta. Based on PSAC’s forecast, next year will be the busiest for drilling since 2014, when oil prices crashed because of global oversupply.
The 2018 estimate is still 30% below 2014 well totals, highlighting the slow speed of recovery. U.S. crude prices are hovering just under $55 a barrel (bbl), well below early 2014 prices of above $100/bbl. “For 2018, confidence that oil will stay in the low-to-mid $50 range as markets tighten and inventories reduce, along with growing interest in Canada’s vast liquids rich natural gas, should support a 4% to 5% increase in activity levels,” PSAC’s President Mark Salkeld said. He also called for more export pipelines to ship Canadian oil and gas to market, warning that TransCanada Corp.’s (NYSE: TRP) recent decision to cancel its Energy East project was a blow to investor confidence.
