Drilling exercise throughout the nation will hit lows not seen in a long time, in keeping with the most recent forecast from the Petroleum Companies Affiliation of Canada.
“This bleak outlook for the oilfield companies sector (OFS), that features a nationwide provide chain with producers in Ontario and Quebec, is devastating for a sector that’s already struggling to outlive on this sixth yr of a downturn,” mentioned PSAC’s interim president and CEO Elizabeth Aquin in a information launch.
She mentioned exercise plunged 42 per cent from 2019 to 2020 and that downward pattern will proceed.
The group expects 2,600 wells to be drilled throughout Canada in 2021. PSAC’s remaining revised forecast for the present yr places the variety of wells drilled at 2,850.
In Japanese Canada, it is anticipated 20 wells will probably be drilled, up from 18 in 2020.
“There may be little incentive for capital funding by the exploration and manufacturing firms to assist elevated exercise and manufacturing,” mentioned Aquin within the launch.
“Restoration from COVID-19 stays elusive, holding international demand for oil at bay, and stability sheets stay challenged and targeted on decreasing debt.”
She took challenge with the federal authorities for bringing in new rules and specializing in local weather change whereas the trade is struggling, which she mentioned hampers funding, whereas acknowledging the Canada Emergency Wage Subsidy and funding for the cleanup of orphaned and deserted wells have each helped.
Aquin, nonetheless, mentioned these aids are both momentary or not serving to everybody within the sector.
“Whereas there are additionally nascent alternatives for some within the OFS sector in geothermal and hydrogen — vitality sources that use lots of the identical companies, rather more is required now to make sure a strong sector emerges for the continued accountable growth, innovation, and new expertise that may advance local weather objectives,” she mentioned.