CAODC issues a flat drilling forecast, but 48 fewer rigs next year

Calgary – Following the Canadian federal election in October, the sentiment toward Canadian oil and gas is nearing all-time lows, said the Canadian Association of Oilwell Drilling Contractors (CAODC) in releasing their drilling forecast for 2020 on Nov. 13.

“Since 2017 the industry has lost an estimated $30 billion in foreign capital, and companies continue layoffs and relocation efforts. CAODC members have moved 29 high-spec drilling rigs, several service rigs, and associated personnel to the United States in order to find work and generate cash flow,” the organization said in a press release.

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As such, it’s projected 2020 wells drilled to be essentially flat at 4,905—an increase of just nine from 2019 (4,896 forecast and actual).

Similarly, projected 2020 operating days come in at 46,599—an increase of 88 from 2019 (46,511 forecast and actual).

Perhaps the one of the biggest news items is an expected 8.8 per cent reduction in the drilling rig fleet. The rig fleet is expected to decrease by 48 (545 drilling rigs to 497 drilling rigs). Six years ago, that number was over 800.

And when it comes to jobs, the total jobs expected is 22,313; flat year over year and a loss of 13,731 jobs compared to 2018.

Punitive regulations in the form of bills C-48 and C-69, delays in Enbridge’s Line 3 pipeline and the Trans Mountain Expansion project have, among other things, left Canadian oil and gas workers with little to be optimistic about, the organization noted.

“It has been another extremely difficult year for our members,” said CAODC president and CEO, Mark Scholz. “The attacks from foreign funded, radical environmental groups, and punitive policy measures from our own federal government have caused Canadian oil and gas families to suffer unnecessarily.”

Canada’s oil and gas industry is at a critical turning point, said the CAODC. “It would appear the only place Canada’s exceptional reputation for technologically driven environmental best practices isn’t recognized is in Ottawa,” explained Scholz. “If we do not create an environment where the oil and gas industry can compete internationally, we won’t have an industry left in this country.”

In order to stabilize the industry and restore confidence, CAODC calls upon the federal government to:

  • Accept Alberta’s climate plan as a federal equivalent program.
  • Repeal bills C-48 and C-69.
  • Guarantee the completion of the Trans Mountain Expansion project using all available tools and resources.
  • Include and prioritize the responsible development and export of Canadian oil and gas as an effective and timely means of reducing global greenhouse gas emissions.  

“It’s time for the federal government to recognize what the rest of the world already knows: the Canadian oil and gas industry is a supplier of choice, good for the environment and the economy, and should be given every opportunity to compete internationally,” Scholz concluded.

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