Oilpatch activity expected to grow in 2011: group

A trade association representing Canadian drilling and service rig contractors says 2010 has brought increased activity to the oilpatch, and it expects more of the same next year.

A trade association representing Canadian drilling and service rig contractors says 2010 has brought increased activity to the oilpatch, and it expects more of the same next year.

The Canadian Association of Oilwell Drilling Contractors said the 83,359 rig operating days recorded during the first three quarters of 2010 were a 60 per cent improvement over the same period in 2009. However, the figure was still 14 per cent lower than for the first three quarters of 2008.

Equipment utilization to date this year has averaged 38 per cent, up from 23 per cent in 2009 but down from 40 per cent in 2008. CAODC expects the rate to average 50 per cent during the remainder of this year, which would result in an overall utilization rate of 41 per cent for 2010 and an average active rig count of 327.

Total operating days this year is expected to reach 119,339.

For 2011, the association expects an average of 356 rigs to be drilling, for a utilization rate of 45 per cent. Operating days are expected to increase by eight per cent, to 128,600.

CAODC noted that 2010 has brought “a significant shift towards oil-focused investment.” Of the wells completed during the first eight months of the year, 3,295 were for oil and 2,946 were for gas. The association expects this focus on oil to continue in 2011.

CAODC’s forecast for 2011 is based on an anticipated price of US$80 for a barrel for crude oil and C$4 per thousand cubic feet of natural gas.

The Petroleum Services Association of Canada, which represents the service, supply and manufacturing sectors of the upstream petroleum industry, plans to issue its 2011 drilling forecast next Monday.