Oil prices crashed below $50…
Oil prices fell on Tuesday…
The number of wells drilled in Canada is expected to increase by 31 percent next year compared to this year, but weak commodity prices coupled with “abnormal” political and social factors may continue to plague the industry, the Canadian Association of Oilwell Drilling Contractors (CAODC) said in its 2017 Drilling Forecast on Tuesday.
Uncertainty over pipeline infrastructure developments and a looming price on carbon will continue to depress Canada’s long-term investment plans, the association said.
Although the number of wells drilled is expected to increase, the rig count is expected to decrease by 55 next year from 665 drilling rigs this year, remaining “near historic lows”, CAODC said. However, the well count is seen to be slightly higher in Saskatchewan, as the province is leading recovery efforts.
“Activity is moving in the right direction, but we’re still in a depressed and desperate economic environment,” CAODC President Mark Scholz said.
Scholz is also calling upon provincial and federal governments to consider the impact of a carbon tax and lack of pipelines on Canada’s investments and jobs in the oil industry.
“In order to achieve a healthy oil and gas industry, governments must ensure its fiscal policies are competitive, predictable, and consider the cumulative costs of doing business in Canada versus other global jurisdictions,” the official says.
Related: Obama Scraps Arctic Drilling Ahead Of Trump Presidency
For years, Canada’s oil companies have been struggling to build enough pipeline capacity to get their oil out of landlocked Alberta, and more than a handful of proposed projects have been stifled by intense opposition from people living in affected areas. The industry is applying a lot of pressure on the Canadian government to allow them to build an outlet out of Alberta. According to Bloomberg, Prime Minister Justin Trudeau is keen on approving at least one major pipeline in his first term.
What’s more, some analysts argue that a Trump presidency could be beneficial to Canadian oil, if the president-elect stays true to his promise to make America energy independent. Since it won’t happen overnight, the most logical alternative to OPEC imports would naturally be Canada.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…