The outlook for oil well drilling in 2016 for Alberta is bleak, according to The Canadian Association of Oilwell Drilling Contractors.
The association revised down its forecast for the year Wednesday, dropping the number of expected well drillings for the year by 25 percent to 3562, compared with its forecast last November.
Association president Mark Scholz says this year is expected to be the worst year for the industry since it started keeping drilling records in 1977.
“My members, the businesses and the workers that have been around and operated through the 80’s are telling me that this is worse than what we experienced back then.”
Scholz says governments aren’t helping.
“We’ve seen the introduction of new carbon taxes and higher corporate taxes here in Alberta,” says Sholz. “And of course we’ve seen the compounded effects of delays in new pipelines and LNG approvals create significant investment uncertainty.”
He also adds he expects it’s going to take years for the industry to recover.
“There’s been a significant amount of damage in the job market, because of the downturn. And it’s going to be hard for us to come out of this.”
Drilling activity has been on a steep decline as the drop in oil prices has prompted companies to cut back on exploration and early development.
Scholz says the higher tax burden and regulatory delays are creating investment uncertainty in Canada. (km/Newstalk770)