Economy Takes a Toll on Canadian Drilling

Petroleum Services Association of Canada Expects Number of Wells Drilled to Drop 21 percent

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Correspondent Derek Armstrong

In a bad news annoucnement for the Canadian resource-dependent economy, the Petroleum Services Association of Canada announced the number of wells drilled will drop to 13,500 in 2009. This is a considerable reduction in previous estimates. The Associated added they expected losses of jobs and losses of companies.

Alberta will be hit hardest in Canada, with the majority of drilling activity. Out of 13,500 wells drilled in 2009, Alberta’s share was 8,455, down from 11,844 in 2008. By comparison, British Columbia is up to 905 wells from 844 in 2008, while Saskatchewan was relatively neutral at 3,805 wells in 2009 vesus 3,986 in 2008. Alberta’s hotly oil-dependent economy will be hardest hit with double digit declines, the lowest since 1998. The hottest uptick in wells drills was the incredible highs of 2005, with 25,000 wells drilled.

Analysts are predicting potentially lower oil prices in coming months, which may hit the oil patch even more brutally.