The drilling industry in British Columbia will have a “brutal” time in 2016 in spite of the province’s hopes for a liquefied natural gas export boom, according to an industry group.
In a forecast released last week, the Canadian Association of Oilwell Drilling Contractors (CAODC) said the oilpatch is on track for its worst year since 1983, with 2016 promising to be just as bad.
CAODC President Mark Scholz said that B.C. could fare better if it finds new markets, but added LNG export projects are still up in the air.
"I would say as long as there's continued movement on the LNG front, B.C. will likely bode better than other jurisdictions," said Scholz. "But if there's any uncertainty around whether those major projects get off the ground and move, I think B.C. will be in the exact same boat as everybody else."
The CAODC estimates 2016 will see 28,000 fewer jobs in the drilling industry in Western Canada compared to 2014. The number of wells drilled is expected to fall 58% from 2014 levels, while operating days are forecast to drop 57%.
The group does not forecast for B.C. specifically, but Scholz said there were few bright spots.
"Gas is sitting at $2.80 (per million British Thermal Units)," he said. "I think other than some companies positioning themselves for the takeoff of LNG, I don't really see anything else that would be creating a buzz in B.C."
While both provinces have been hard hit by falling oil prices, the impact has been more severe in Alberta than in B.C.
Operating days, a measure of drilling sector strength, fell from 90,161 in 2014 to 32,616 year-to-date in Alberta—a decrease of around 64%.
B.C. saw a decline of 45%, from 16,616 days in 2014 to 9,129 year to date.
"I think across the board it's still a brutal industry," said Scholz.
"(B.C. may have) a little more activity from a relative standpoint, but nobody's making money in this business."
The group estimates a single drilling rig supports around 135 jobs.
