Canadian Oil Drilling Seen Topping Pre-Covid Levels in 2022
(Bloomberg) -- The pace of oil and gas drilling in Canada next year will exceed levels seen before the pandemic as producers ride the global energy rally, an industry group said.
The number of oil and gas wells forecast to be drilled in 2022 will rise 27% to 6,457, the most since 2018, the Canadian Association of Energy Contractors said Tuesday.
In addition to rising global energy demand and prices, Canadian oil producers are benefiting from increased pipeline export capacity after the completion of Enbridge Inc.’s Line 3 pipeline to the U.S.
Still, energy companies are being disciplined as they pay down debt incurred during the 2020 market crash triggered by the pandemic. The trade group called the foretasted increase in the number of wells “only marginally stronger than 2019 drilling levels.”
The biggest challenge with the increase in drilling will be finding enough people to staff the oil rigs after many workers left the industry following years of downturns, the group’s chief executive officer, Mark Scholz, said by phone.
“I think the biggest risk in our forecast is going to be labor constraints,” he said. “The big unknown is, are we going to find all the people to staff 2,010 rigs in the first quarter?”
©2021 Bloomberg L.P.