CANADIAN OILPATCH / ACTIVITY
October 27, 1996
SASKATCHEWAN OIL INDUSTRY BOOMING
Oil exploration in Saskatchewan is heading toward new records in 1996.
About 20% more oil wells were being drilled by the middle of October
compared with the same period last year. By Oct. 15, a total of 1,252
new oil wells were being drilled compared with 998 in 1995, according
to provincial government numbers.
A record 117.5 million barrels of oil were produced in 1995. According
to one oil company official, the super-charged oil industry is putting a
strain on available hardware.
ÿ
"Right now, if you happen to get a drilling rig, you don't let it go," said
Lowell Jackson, chief operating officer for Grand and Walker Energy.
Jackson was in Saskatoon this week for a petroleum industry forum at
the University of Saskatchewan. He said his Calgary-based company
has six rigs drilling in the Kindersley area.
Three factors are fuelling the oil industry growth in Saskatchewan, he
said. World demand for oil has increased along with the price ($24.83
at Friday's close) because of the trade embargo against Iraq.
A change in the way refineries handle oil has also contributed to rising
demand and prices. Three years ago, refineries stopped keeping large
amounts of crude on hand. Now when price and demand rise,
exploration companies immediately feel the effect.
The third spur is investment.
"Many mutual funds are looking for a place to put their money," said
Jackson. "When they see a commodity is hot, their money follows.
And there is a lot of money out there." The money gives companies
the freedom to look for more oil. According to the provincial government,
the number of land rights and licences being purchased indicates the
trend will continue in 1997. "When companies are spending money
on land rights, they don't like spending a lot of money and watching it
sit," said Roy Clayton, deputy minister of Saskatchewan Energy and
Mines. |
