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Canadian Industry Body Boosts Oil, Gas Drilling Forecast By 8%

siliconreview Canadian Industry Body Boosts Oil, Gas Drilling Forecast By 8%

In a recently created buzz, it is been ascertained that Canadian light oil producers will drill more wells than before predictable this year as the sector benefits from investors transferring capital out of the oil sands, the Petroleum Services Association of Canada recently.

In a revise to its annual drilling forecast PSAC said 7,200 wells will be drilled this year, 8 percent superior than its previous estimation of 6,680 wells.

The industry body understood it had undervalued how quick investors are looking for a swifter return on capital in a low oil price environment would toggle from long-term investments in the high-cost oil sands to short-cycle liquid rich natural gas and shale oil plays.

"One of the events that played out that were not well understood at the time of the original forecast was the relatively quick impact of the transfer of investment out of the oil sands into the conventional sector," said PSAC chief executive Mark Salkeld.

“That helped boost the drilling rig count to more than 300 active rigs in the first quarter of this year, well above PSAC estimates of around 200.” Salkeld added.

The International energy companies have sold off around $23 billion in Canadian oil and gas assets this year alone, with the gigantic bulk of agreement captivating place in the oil sands sector.

While Alberta's oil sands are house to the world's third-largest oil reserves but also carry some of the uppermost operating costs internationally, whereas Canada's smaller light oil and natural gas sector tender cheaper honest investment and rapid returns.

Cost cuts from oilfield services companies were also serving boost drilling, but Salkeld warned the slim margins could not hold up originality and better techniques in the sector.

He also said that the complexity in receiving oil export pipelines built and resistance to novel infrastructure projects was hurting the energy industry, citing the decision by Malaysia's Petronas to cancel its C$36 billion Pacific NorthWest LNG project in British Columbia last week.

"Canada continues to struggle with its place in the world of energy supply given our lack of access to tidewater and public support for infrastructure suggesting the lofty levels of activity seen in 2014 are likely a thing of the past," Salkeld said.