The President of the Canadian Association of Oilwell Drilling Contractors is predicting lean times in the oil patch, for at least the first part of this year.
Don Herring is blaming the drop in worldwide commodity prices but, he says drilling activity in BC and Saskatchewan should not suffer, to the same degree as in Alberta.
He cites the new royalty schemes, which took effect in Alberta on January first, will further contribute to the drilling decline there.
They will reportedly see royalty rates increase, by about 50 percent on production and prices.
It’s speculated that will cause an increasing number of companies to look to neighboring provinces like BC and Saskatchewan, in which to invest their capital.
However, Mr. Herring says the fact that this region relies more on natural gas production than convention oil, does not make it immune to the economic meltdown.
He notes the drop in natural gas prices is not as significant, as the collapse in oil prices.
However, he also notes, they’re sitting under six dollars per one thousand cubic feet and, the industry needs them in the eight to nine dollar region.