Drilling forecast gloomy as oil prices continue downward slide
Industry group predicts 10% drop in drilling activity next year
One of Canada's oil industry associations is predicting a 10 per cent drop in activity next year.
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The Canadian Association of Oilwell Drilling Contractors (CAODC) says there are three factors at play — the falling price of oil, uncertainty over new pipelines and liquid natural gas shipments to the west coast.
CAODC president Mark Scholz said the slowdown in drilling won’t just affect trades workers, given that every rig generates as many as 200 direct and indirect jobs.
“It's a ripple effect right across Canada, because not only is the labour piece but also, you know, there's the manufacturing piece,” he said.
“And if we have a slowdown in the oilsands that's going to have an impact in areas of Ontario and Quebec that manufacture a number of pieces of equipment that end up being used in Alberta.”
Scholz said if the price of oil drops much further the drilling forecast could be downgraded again.
Earlier this week the international credit rating agency Moody’s said Alberta has enough fiscal flexibility to keep its high credit standing even if the price of both West Texas Intermediate and Brent crude fell to US $60 per barrel and stayed there into the 2015/2016 fiscal year.