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According to the Petroleum Services Association of Canada (PSAC), the Canadian light oil producers will drill more wells this year than previously expected. The oil sector is expected to see an increase in exploration and production activity as the sector benefits from investors transferring capital out of the oil sands. Basing its forecast on $49 per barrel for WTI (West Texas Intermediate, the U.S. benchmark), the PSAC said it expected 7,200 wells to be drilled this year, up from its initial forecast of 6,680.
“One of the events that played out that was 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”, Mark Salkeld, Chief Executive of PSAC. “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.
Canada is largely landlocked as an oil producer and sends nearly all of its exports to the United States. Due to the lack of access to tidewater and public support for infrastructure, Canada continues to struggle with its place in the world of energy supply. However, it is courting the expanding economies in Asia as a way to expand its options. In an early July survey, the Canadian Association of Petroleum Producers said Canadian oil should be shared with the world.