Canada’s drilling rig count has plummeted far below previous records. This raises risks that much of the country’s equipment will permanently fall out of service. Baker Hughes data showed just 18 rigs were active last week in the country, a fraction of even the depressed levels of a year ago.
As companies decide against costly recertifications of equipment, the fleet looks likely to shrink 25 percent in the next year from the current 500, chief executive of Precision Drilling Corp said. The Canadian energy industry has struggled for years, and its services sector, which drills and maintains wells, may face a longer recovery than rivals in the US.
Compared with 120 rigs a year earlier, just six oil drilling rigs were active as of July 2, along with 12 gas rigs for a total of 18. It marked a rare week-to-week increase from 13 rigs, reflecting the seasonal summer pickup when the ground dries from spring snow melt.
Most of Canada’s oil comes from the oil sands, long-life facilities that do not require regular drilling like shale or conventional production. Chief executive of Peyto Exploration & Development Corp said contraction of the drilling and service industry would make it difficult for oil and gas producers to boost output once the industry rebounds.
