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HomeNewsDrilling forecast paints bleak picture, but optimism in industry remains: expert

Drilling forecast paints bleak picture, but optimism in industry remains: expert

The former president of the Grande Prairie Petroleum Association says the 2021 Canadian Oilfield Services Activity Forecast paints a fairly bleak picture. The Petroleum Services Association of Canada estimates there will be 1,230 wells drilled in Alberta next year, which is a drop of 118 from the year prior.

Overall, it’s predicted a total of 2,600 wells will be drilled in Canada in 2021 based on a forecast of an average price of crude at $42 U.S. per barrel and the Canadian dollar averaging $0.76 U.S. Rob Petrone says, despite his optimism that corners are still there to be turned, the industry as a whole is in a tricky situation.

“It’s challenging times… and it’s a sign of the times of the industry worldwide, and it has a direct impact on all of us. It’s all supply and demand, and, with all the uncertainty going on and the pandemic we are dealing with worldwide, the consumption just isn’t there.”

Petrone says the one silver lining from an industry perspective in recent weeks comes from the provincial government recently announcing plans to lift the limit on monthly oil production. He notes while 16 per cent of Alberta’s crude oil production remains offline, the move could make a big difference in the long run.

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“It does to the extent that there is shut-in oil and they’re able to bring it back on. The access to capital has essentially dried right up, so the more cash that companies can generate the better.”

He adds, to continue the push to bring the industry back into a pre-pandemic state is essential and he is calling on multiple levels of government to put their noses to the grindstone and get it done.

“It would sure be nice to see governments work closer together and recognize the value this brings and really focus on trying to attract capital back in and keep developing these resources in a safe, and environmentally friendly way, we are all committed to that.”

The 2021 forecast is nearly half of what was forecast during the pre-oil price plunge in 2015, when 2,839 wells were forecast for the province.

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