While its forecast New Year drilling activity numbers are down again, the President and CEO of the Petroleum Services Association of Canada says there could be some improved oil and gas industry economic news near the end of next year.
PSAC forecasts the number of wells drilled next year in the four western provinces to be slightly less than this year, and down more than 50% over the previous five-year average of 11,670.
We spoke with Mark Salkeld following the PSAC Annual General Meeting this week, in Calgary.
It should be noted that CAPP is the Canadian Association of Petroleum Producers, but Mr. Salkeld also talked to us about the results of last month’s federal election, noting the new Liberal government is likely to take a couple of years to get up to speed and make any major decisions, which would impact the industry.
When commenting specifically on the 23rd Prime Minister, he referenced Justin Trudeau’s election campaign commitments.
The most unpopular issue in Western Canada caused by his father’s government was the National Energy Program created in 1980.
It was widely viewed in this part of the country — especially Alberta — as among the most unfair federal policies ever implemented.
In the early 1980’s, the global economy deepened into the worse economic downtown since the dirty thirties, and the country experienced higher jobless, inflation, and interest rates, with the Bank of Canada rate hitting a whopping 21% in August of 1981.
The much-maligned NEP has been calculated to have cost Alberta between $50 – 100 billion. Nationwide, in 1982, there were over 30,000 consumer bankruptcies, a year-over-year increase of 33%.
For many who experienced the mess, avoiding a repeat is an economic must, and here in BC, most view LNG industry development as the best defence against it.
Of particular concern is a forecast drop of 28% of the number of wells drilled in BC, and Salkeld says, that’s all about the delay in getting a final investment decision, on the Pacific Northwest LNG project.
With the price of crude oil still well below $50-a-barrel, the speculation continues about the major oil and gas companies moving more vigorously into the development of clean energy.
Now speaking of best returns, it should be noted the major oil and gas companies are a long way from dire straits, and last year six of them — half of them state-owned — occupied the top seven spots behind Walmart, on the list of the world’s largest public, state-owned and private businesses by consolidated revenue — and those revenues ranged, from 461 to 359 billion US dollars.