CALGARY — The Petroleum Services Association of Canada says it foresees an improving picture for the country’s oil and gas drillers.
The Calgary-based group said Monday it predicts 12,750 new wells will be drilled across Canada in 2011 — a four per cent increase from its November forecast and a nearly five per cent increase over 2010 levels.
Much of the strength is expected to come from higher crude oil prices, which PSAC anticipates will average US$85 per barrel in 2011.
“Due to strengthening oil prices and innovations in technology, we expect 2011 to continue to see modest increases in drilling levels from 2010, recognizing shortages in skilled labour that restrict the ability of drilling and petroleum service providers to realize full output capacity,” said PSAC prescient Mark Salkeld.
Natural gas drilling, however, is expected to encounter further headwinds, with prices of that commodity expected to average a lacklustre C$3.85 per 1,000 cubic feet this year.
“The industry is still faced with weak natural gas prices primarily related to oversupply in the market. The burgeoning supply of natural gas — despite reduced levels of drilling — is a direct result of shale gas production,” Salkeld said.
Saskatchewan — home to big oil zones like the Bakken — is expected to see an 11 per cent increase in wells drilled.
PSAC estimates that British Columbia, where the Horn River and Montney shale natural gas plays are located, will post a seven per cent drilling increase.
The number of wells drilled in Alberta is expected to grow by three per cent, while Manitoba is expected to move up by one per cent.