CAOEC releases optimistic drilling forecast numbers
The Canadian Association of Energy Contractors (CAOEC) has released its Q4 2021 and 2022 Drilling Forecast.
After a troubling 2020, 2021 activity levels picked up as COVID-19 restrictions eased globally and energy consumption reached pre-pandemic levels by fall, as the industry experienced strong commodity prices in natural gas and oil, driving activity across Western Canada throughout the year.
Here are a breakdown of the numbers:
- Projected 2022 wells drilled: 6,457 – an increase of 1,363 from 2021 (5,094*)
- Projected 2022 operating days: 58,111 – an increase of 12,268 from 2021 (45,843*)
- Rig fleet expected to decrease by 8 (489 drilling rigs to 481 drilling rigs)
- Total jobs expected = 34,925, an increase of 7,280 year-over-year
*forecast + actual
“After the historic lows we endured last year, 2021 served as a beacon of hope for our sector,” says CAOEC President and CEO, Mark A. Scholz. “The solid rebound on energy demand and subsequent energy shortages across Europe and Asia emphasize the necessity of increased export capacity. Now more than ever before, the world needs Canada’s best-in-class energy. The industry’s labour challenges will continue, but we are confident in the long-term as the world demands our resources.
“A recovery is well underway in the industry, and the best is yet to come in Canada’s energy sector.”
2021 was a year of optimism for the Canadian energy service sector. CAOEC members were involved in a number of projects to reflect the evolving energy landscape, including geothermal, helium, hydrogen, and CCUS activities. However, following years of lows, CAOEC members struggled with crew constraints due to labour shortages, hampering the sector’s ability to meet growing demand.
Encouraging news of additional export capacity came with the completion of Enbridge Line 3. Although U.S. President Biden revoked the permit for Keystone XL pipeline, other projects such as the Trans Mountain Expansion and Coastal GasLink made significant progress and are moving forward. This news, combined with strong pricing for natural gas and the highest oil prices since 2014, suggest 2022 activity should continue to be positive. Yet, in comparison to recent years, the forecasted increase of 1,363 wells and 12,268 operating days means 2022 is only marginally stronger than 2019 drilling levels.