After struggling for the last five years with low commodity prices, the oilpatch is expected to have its worst year on record for drilling activity, according to a new report by the Canadian Association of Oilwell Drilling Contractors (CAODC).
The organization is expecting activity to pick up in 2021, although there is still considerable uncertainty facing the sector.
The group anticipates 3,296 wells to be drilled this year and 3,771 in 2021. That compares with 5,545 wells drilled last year.
“The prospects for an effective COVID-19 vaccine are promising, but the impact of the pandemic on energy demand in 2021 and access to capital for our members and their customers remain a challenge,” said Mark Scholz, president of the CAODC, in a statement.
As the number of COVID-19 cases spikes across North America, there could be impacts on fuel demand as various government restrictions are introduced.
Many oilpatch companies announced layoffs this year and reduced spending because of low oil prices, especially after they fell into negative territory in April.