CANADIAN OILPATCH / ACTIVITY
Canadian oilwell drillers are gunning to finish a record year and the
fever-pitched pace of hunting for oil and gas is expected to remain
strong in 1997.
"Our projection for 1996 is a banner year for industry," Roger Soucy,
president of the Petroleum Services Association of Canada, said
Wednesday. "For 1997, we're projecting another excellent year."
PSAC expects to see 12,601 wells drilled in Western Canada this
year and 12,339 in 1997. The previous peaks were 11,716 wells in
1994 and 11,691 in 1985. Each well drilled creates an estimated 75
jobs.
With oil prices at the highest level since the 1991 Gulf War, oil is
the target of choice, while gas drilling has suffered from weak prices
over the past year.
For the first time in PSAC's 15-year history, the 10-year average for
wells drilled is more than 8,100 a year.
To support the bright picture, the Canadian Association of Petroleum
Producers is calling for healthy production growth in oil and gas to
the year 2000.
"It's sort of fun to come and speak about the outlook because it's
quite optimistic," said Richard Woodward, vice-president of CAPP.
Canadian oil production, now about 1.95 million barrels a day, is
expected to rise to 2.2 million barrels by 2000. That's excluding
Canada's East Coast, where Hibernia and Terra Nova are
scheduled to begin production between 1997 and 2001.
Natural gas production, which has seen strong growth for the past
eight years, is now about 5.5 trillion cubic feet a year and should
reach six trillion by 2000, CAPP said.
The annual PSAC forecast comes as producers are closing 1996
riding crude oil prices above $25 US a barrel. "We've got much
higher oil prices than anyone expected," Woodward said. Those
levels are expected to tumble next spring to $18 to $19, but toward
the end of the century, CAPP is forecasting prices of $20 to $22 a
barrel.
In natural gas, 1997 prices are expected to average $1.60 per
thousand cubic feet, up from the current level of about $1.40,
CAPP said.
Given that many Canadian companies have pushed exploration,
development and operational costs to historic lows, the projected
lower oil prices still provide healthy gains.
If the drilling grows much above the projections, oil companies may
have trouble finding rigs. "The industry is probably pushing its
maximum capacity," Soucy said.
Despite the rush to drill, rigs are not expected to start travelling north
from the U.S. to meet demand and fabricators are not anxious to
build new machines. So the fleet size is expected to remain level
and drilling prices in 1997 are forecast to rise about five per cent,
Soucy said. |
