Western Canada to increase oil and gas drilling to pre-pandemic levels – CAOEC

A pipe depot serving the government-owned Trans Mountain pipeline operator is seen in Kamloops, British Columbia, Canada on June 7, 2021. REUTERS / Jennifer Gauthier / File Photo

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Nov. 23 (Reuters) – Western Canadian oil and gas producers will drill 27% more wells in 2022 than the year before, returning to pre-pandemic levels as prices rebound and prices rise. Pipeline projects are advancing, the Canadian Association of Energy Contractors (CAOEC) said on Tuesday.

The companies are expected to drill 6,457 wells, an increase of 1,363 from 2021 and slightly above the 2019 total, the association’s chief executive Mark Scholz said in a statement. CAOEC represents energy service companies.

The increase follows a year in which Enbridge Inc (ENB.TO) completed its Line 3 pipeline replacement project, allowing more oil to flow from Alberta to refineries in the US Midwest , and as energy use picked up as COVID-19 restrictions eased, CAOEC said.

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Two other major pipelines, the Trans Mountain Pipeline Expansion and Coastal Gaslink, are under construction.

Labor shortages, however, hampered efforts in the service sector. CAOEC predicts that the number of rigs in Western Canada will drop from eight to 481 rigs next year.

Conventional light oil and condensate production accounts for about one-fifth of Canada’s crude production, according to Canada’s Energy Regulator. The majority of the country’s oil production is made up of heavy oil from the oil sands of Alberta.

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Reporting by Rod Nickel in Winnipeg; Editing by Jan Harvey

Our Standards: Thomson Reuters Trust Principles.

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