On July 19, The Financial Post’s Claudia Cattaneo wrote a piece entitled “Saskatchewan advantage means oil activity surges while Alberta lags.”
Maybe we missed something while on summer holidays. Apparently the Financial Post knows more than we do about the Saskatchewan oilpatch. Surely, they do, because we run into them all the time at oil shows, petroleum conferences, on leases, rights-of-way and in oilfield service company offices. Surely Ms. Cattaneo has been to all these venues in the past four months, right? She’d know what’s going on here?
Oh wait. We never saw her at any of those places we’ve been to, here, on the ground. Indeed, we wonder if she’d know the difference between a drilling rig and a service rig from a mile away. (A service rig leans a little.) Apparently she’s received a National Newspaper Award for her 2015 coverage of the oil price collapse. But does she ever get out, on the ground, in coveralls, boots and hardhat?
But because BlackPearl Resources is going ahead with a SAGD project at Onion Lake Cree Nation, apparently we’re seeing a surge in activity.
“A surge in interest in Saskatchewan oil by companies like BlackPearl, motivated to get back to work after an extended oil price downturn, means the province is experiencing a healthy rebound in activity this year, while Alberta’s oilpatch continues to struggle as capital and companies move elsewhere,” she wrote.
“According to the Canadian Association of Petroleum Producers, capital spending in Saskatchewan will bounce back to an estimated $6.1 billion in 2017, from $3.5 billion in 2016, $4.2 billion in 2015 and $6.7 billion in 2014.”
Must be all good, now, right? Come on, with around 47 drilling rigs working through much of July, roughly half of what we would see in July from 2008 to 2014, we must be surging. Or maybe it’s a surge because we’re only down by half, this year, compared to last year, whereas we were down by 85 per cent to 15 rigs working on July 12, 2016. Maybe that’s the surge. Perhaps the plethora of three and four drilling rig companies that only have one rig working is the surge. She must be including the drilling companies who don’t have any rigs working at all in her surge, too.
Never mind that those drilling rigs took four rounds of cuts to their day rates, and most are working for rates that are more than a third less than their 2014 rates. There’s a surge in interest!
Could the surge be in the continued consolidation of fracking companies?
Or maybe the other oilfield services companies, who have started to gingerly hire a few more people in the last six months, are the surge. Never mind their staffing levels were down by half, on average, compared to 2014.
Maybe it’s all the money these oilfield service companies are making. This summer they might be able to pay the power bill for the office. But buy new equipment this year? Or next year? Or even the year after that? That might be pretty tough, based on the rates the oil companies are willing to pay at present. So the surge in equipment capital expenditures must be what she was talking about.
And the salaries those companies are paying, down substantially for nearly every person in the oilpatch. Maybe they’re the surge.
As expected, Minister of Energy and Resources Dustin Duncan said nice things to the Financial Post. But that’s what he has to do, no matter what. Up until the most recent land sale, Crown land sales have been abysmal, yet the minister had to say something nice about it.
The surge must, therefore, be in the number of job postings. But most people who we’ve spoken to have said they can’t pay nearly what they used to, and they expect it will be hard to fill jobs because such a huge number of people have left the oilpatch and are not coming back.
Don’t get us wrong. This paper has spent nine years cheerleading every bit of good news we could find on the Saskatchewan oilpatch. But the Financial Post’s piece was a little rich.
So we invite Ms. Cattaneo to come to Estevan. Lloydminster might be a bit tough, because, well, the mileage budget these days is pretty sparse. But we’ll give her a tour, and search for this surge of hers.
