“This investment shift played an important role in taking
a rig count from what we thought would be closer to 200 active rigs to well over 300 in first-quarter 2017,” he said.
“The cost reductions from the services sector demanded
by their customers are also still playing a significant role in
helping with activity levels enabling [exploration and pro-duction] companies to drill more wells at less cost,” Salkeld
noted. “The downside to this is that slim services sector margins mean less funds available for new [research and devel-opment] and innovation.
“Only those players with deep pockets can continue to
develop leading edge technologies and process solutions,” he
said. “The very unsophisticated and borderline archaic sup-
ply chain and collaboration relationships in Canada do not
support a model for continuous improvement.”
Salkeld added, “Canada continues to struggle with its
place in the world of energy supply given our lack of access
to tidewater and public support for infrastructure, suggest-
ing the lofty levels of activity seen in 2014 are likely a thing
of the past. The decision last week by Petronas to abandon
the Pacific NorthWest LNG project in BC is yet another sign
that investors see better opportunities for their capital else-
where (OGJ Online, July 25, 2017).”
The Petroleum Services Association of Canada (PSAC) has
updated its 2017 Canadian Drilling Activity Forecast to re-
flect an increase in its projected total number of wells to be
drilled during the year to 7,200 from 6,680.
PSAC based the update on average natural gas prices of
$2.75 (Can.)/Mcf for AECO, crude oil prices of $49 (US)/bbl
for West Texas Intermediate, and the Canada-US exchange
rate averaging 77¢.
On a provincial basis for 2017, PSAC now estimates 3,604
wells to be drilled in Alberta, up from 1,900 wells in the
original forecast. It is expected 580 wells will be drilled in
British Columbia this year, with PSAC’s revised forecast up
300 wells from the original forecast. The revised forecast for
Saskatchewan now sits at 2,794 wells compared with 1,940
wells in the original forecast. Manitoba is now forecasted to
count 206 wells.
“One of the events that played out that was not well understood at the time of the original forecast was the relatively quick impact of the transfer of investment out of the
oil sands into the conventional sector and, more specifically,
towards liquid rich natural gas and light tight oil, which ultimately provide a faster return on investment dollars than the
longer-term investment oil sands projects,” explained Mark
Salkeld, PSAC president and chief executive officer.
PSAC increases its Canadian drilling forecast for 2017
Baker Hughes: Canada boosted global rig count in July
The number of active rigs drilling worldwide climbed by
69 month-over-month in July to average 2,041, according
to Baker Hughes data. The count was up 629 year-over-year.
Canada provided most of the monthly rise, gaining 48
rigs in July compared with its June average to tally 198, an
increase of 104 year-over-year. It marked the second straight
month in which Canada led global gains, reflecting a better-than-expected seasonal ramp up in drilling.
The US rig count was up by just 22 month-over-month
in July to 953, an increase of 504 year-over-year. As of the
week ended Aug. 4, the US count had fallen in 3 the previous 6 weeks.
Latin America increased 4 units month-over-month in
July to reach 196, up 10 year-over-year. Argentina jumped
5 units to 65, down 7 year-over-year. Colombia climbed 3
units to 23, up 17 year-over-year. Venezuela edged up a unit
to 50, even with its year-ago average. Mexico, meanwhile,
dropped 3 units during the month to 21, down 2 year-over-
year. Brazil declined a unit to 16, up 1 year-over-year.
Africa rose 3 units month-over-month in July to 89, up 7
year-over-year. Algeria edged up a unit to 58, an increase of
3 year-over-year. Nigeria also gained a unit and averaged 9,
up 4 year-over-year.
The Asia-Pacific region edged up a unit month-over-
month in July to 196, an increase of 9 year-over-year. Off-
shore China jumped 4 units to 24, down 4 year-over-year.
India dropped 2 units to 108, down 5 year-over-year.
The Middle East sat unchanged during July at 397, still
up 7 year-over-year. Saudi Arabia’s count averaged 119 for
a fifth consecutive month. Iraq gained 2 units to 53, up 14
year-over-year. UAE-Abu Dhabi also rose 2 units and aver-
aged 51, up 3 year-over-year. Egypt fell 4 units to 23, down
Europe dived 9 units month-over-month in July to 82,
down 12 year-over-year. Serbia and Montenegro lost all 3 of
its active rigs. Norway dropped 2 units to 13, down 7 year-over-year. Italy declined 2 units to 2, half its year-ago average. Offshore UK gained 2 units to 10, even with its year-ago