PETROLEUM DIRECTORY: Ten years ago in Alaska & northern Canada’s oil patch…..Oil and gas drilling soars to all-time record in Canada in 1996
This section consists of partial reprints from Petroleum News Alaska (predecessor to Petroleum News).
—Petroleum News Nov. 18-Dec. 15, 1996 Oil and gas drilling in Canada is soaring to an all-time record in 1996 (at least 30 percent above the original forecasts) and 1997 looks almost as spectacular, say the leading petroleum industry organizations.
Forecasters are predicting higher natural gas prices, stable oil prices, and a hefty increase in the number of wells drilled over the next 5 years as the industry takes advantage of a windfall cash flow, interest rates plunging to a 60-year low, the strongest Canadian dollar in more than two years and certain relief from prolonged gas oversupply.
The Petroleum Services Association of Canada expects Canada will end 1996 with 12,601 wells, eclipsing the 1994 record of 11,716 wells, and it is projecting a well count of 12,340 for next year, pushing Canada’s 10-year average over 8,000 wells for the first time. PSAC President Roger Soucy, estimating exploration spending will reach C$5.85 billion in 1997, said the outlook “provides the upstream sector with another very healthy and very stable level of activity. …”
Whatever the outcome the pipeline sector is facing the hottest building bonanza in 20 years as six different projects vie for producer support.
At the top of the list is the new Alliance Pipeline Ltd. … TransCanada PipeLines Ltd., the established gas pipeline giant, is poised to repulse Alliance’s challenge. … Another tilt at the monopoly is the contentious Palliser Pipeline project— owned by PanCanadian Petroleum Ltd. and Westcoast Energy Inc. … Nova Corp. … and finally, Northern Border Pipeline Co.
Looking as good next year? PSAC’s breakdown for 1997 includes 6,580 oil wells (reinforcing the new-found popularity of oil), 3,000 gas wells, 2,190 dry holes and 300 service wells, Alberta will lead the provinces with 74 percent of the drilling activity, or 9,100 wells, PSAC said.
But Soucy cautioned that if drilling grows much above the PSAC’s projections, exploration companies might have difficulty finding rigs. “The industry is probably pushing its maximum capacity,” he said.
It is unlikely any rigs will cross the boarder from the United States and the Canadian fleet numbers will remain largely unchanged, while drilling costs will rise about 5 percent, he said.
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