The Petroleum Services Association of Canada is cutting 1,000 wells from its 2019 drilling forecast due to what it calls deteriorating investor confidence in Canada.
The industry group says it now expects 5,600 wells to be drilled in Canada this year, down from its November forecast of 6,600, and 19 per cent behind the 2018 total of 6,948 wells drilled.
PSAC CEO Gary Mar says a lack of market access continues to discourage investment in oil and gas exploration and production in Canada.
He says Alberta’s decision to curtail oil production by 325,000 barrels per day as of Jan. 1 has added to uncertainty levels, leading to more delays on spending decisions by producers.
READ MORE: Eastern Alberta communities fear NDP’s oil production cap change will mean job losses
Watch below: (From Dec, 3, 2018) Global’s Scott Fee explains what Alberta’s oil curtailment means and why it’s needed.
He says his members are laying off workers and struggling to stay solvent with current active rig levels below 40 per cent, down from over 50 per cent at the same time last year.
The forecast reduces the number of wells expected to be drilled in Alberta by about 580 to 2,950, and in Saskatchewan by about 450 to just under 2,000.
READ MORE: Canada won’t fill Venezuelan oil gap amid sanctions – but Mexico, Iraq will: analysts