Page 9 - NorthAmOil Week 46

NorthAmOil COMMENTARY NorthAmOil

Canada forecast to see 2021

drilling rebound after 2020 lows

The Canadian Association of Oilwell Drilling Contractors expects that 2020 will be

the worst year on record for drilling in the country, but the group forecasts a slight

rebound in 2021

CANADA CANADA’S oil and gas industry has been WTI, at around $32 per barrel. In 2014, 13,089
battered by this year’s downturn and the com- wells were drilled in Canada.
WHAT: bination of global oversupply and depressed The CAODC also predicted improvements
Canada is projected to demand owing to the coronavirus (COVID-19) in other markers of Canadian industry activity.
see a rebound in drilling pandemic. But there are hopes that things will The group expects operating days in 2021 to rise
in 2021 after this year improve, even as the industry continues to face to 33,938 from a forecast 29,664 in 2020, and
is set to be the worst on some of the challenges that have contributed to anticipates the number of industry jobs climb-
record. making 2020 a particularly bad year for Cana- ing by 2,349 year on year to 18,550. However, it
dian oil and gas. has projected that the rig fleet will decrease to
WHY: 478 rigs next year, from 505 in 2020 – though
The CAODC is hoping that Slow recovery given how aggressively the industry continues
an effective COVID-19 This week, the Canadian Association of Oilwell to pursue efficiency gains, production can rise
vaccine will mitigate Drilling Contractors (CAODC) released its 2021 while rig counts fall.
against the impact of the drilling forecast. The group said that while 2020 The CAODC cited progress in areas includ-
virus on demand. was the worst year on record for the Canadian ing pipeline infrastructure as being behind its
industry, it expected to see an improvement in expectations of rising activity next year. This
WHAT NEXT: 2021. was, it said, despite new uncertainty over the
Other forecasts are The CAODC projects that 3,296 wells will fate of the cross-border Keystone XL pipeline
more pessimistic, with be drilled this year, down from 5,545 in 2019, in the wake of Democrat Joe Biden’s victory in
the Petroleum Services and has forecast that this figure will rise to 3,771 the US presidential election, because other pro-
Association of Canada wells in 2021. Even with the increase, however, jects continued to advance. The CAODC cited
projecting a further the 2021 figure would represent a 71% decline progress on the Trans Mountain expansion,
decline in well numbers from 2014 – the year oil prices started dropping Coastal GasLink and Nova Gas Transmission
next year. from around $100 per barrel. They have stayed Ltd (NGTL) expansion projects.
low since, with Brent hovering at around $44 “These developments, combined with upward
per barrel today, while West Texas Intermediate pricing forecasts for natural gas, the recovery in
(WTI) is closer to $41.50 per barrel and Western oil prices from 2020 lows, and the gradual intro-
Canadian Select (WCS) trading at a discount to duction of the federal government’s CAD1.7bn

Week 46 19•November•2020 www. NEWSBASE .com P9