Drilling group says oil and gas industry in for another rough year in 2016

The drilling industry group according to the oilpatch is in for another yr of weak activity because commodity prices continue to crunch.

The Petroleum Services Organization of Canada expects five, 150 wells to be drilled in Canada in 2016, straight down from an estimated 5, 340 wells this year.

And it's an infinitely more dramatic drop from the five-year average of 11, 670 the industry saw before primitive prices started to nosedive after which languish below US$50 the barrel for months.

Association TOP DOG Mark Salkeld says the field hasn't been able to make anything at all better out of a bad scenario because of pipeline constraints as well as policy uncertainty.

The team is basing its going assumptions on crude costs of US$53 a clip or barrel, natural gas at $2. seventy five per 1, 000 cubic feet and the Canadian buck at 75 cents Oughout. S.

"Low commodity rates, oversupply and low money flows obviously impacted all of us significantly in 2015, leading to an over 50 % loss of activity from earlier year averages, " stated Salkeld.

"With those same aspects continuing, we can't anticipate anything better for 2016. "

PSAC represents businesses that provide drilling and other solutions to the oil and gas sector. When producers scale back their outcome due to low prices, PSAC people see a drop in their company, too.

U. S. standard crude prices are currently close to US$48 a barrel -- below what many suppliers need to make ends meet.

When PSAC issued its original 2015 forecast in October 2014, it was expecting crude price ranges of US$85 a barrel or clip.

The Canadian Association associated with Petroleum Producers has approximated 36, 000 jobs happen to be shed in the oil and gas business this year, mostly in Alberta.

It's been estimated that each energetic drilling rig represents one hundred thirty five direct and indirect jobs.

In Alberta and Saskatchewan, the level of action is forecast to be toned 2015 into 2016. Manitoba is expected to see a minor improvement, while British Columbia is within for a 28 per cent decrease.

In addition to low prices, the lack of foreign trade pipeline capacity is also a serious problem, said Salkeld.

The PSAC forecast comes a day right after TransCanada Corp. (TSX: TRP) asked for a delay within the U. S. review of the cross-border Keystone XL suggestion, potentially adding another 12 months to what has already been a prolonged seven-year process.

"We possess the third-largest oil reserves on the planet, but have less than four percent of the global market share, inch said Salkeld.

"We're long lasting, yes, but as a country we have to get on with addressing the issues which are limiting our resource areas, especially our energy sources, from contributing to the nation's prosperity and its reputation like a responsible developer of organic resources. "

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