​Future growth for Saskatchewan's oil and gas sector still uncertain

Image: Joey Podlubny/JWN

As the price per barrel of oil lingers in the ballpark of $50, the oil and gas industry continues to chug on in the Estevan area of southern Saskatchewan, making the most of what is available.

Although the activity in the oilpatch has not come close to returning to the levels it was at before the dramatic 2014 slide in the price for a barrel of oil, some in the industry are seeing an incremental increase in activity.

Tom Copeland, vice-president and COO of Fire Sky Energy, said that he has seen an uptick in oil and gas activity in the Estevan area, but is reluctant to attribute the increase to only the price per barrel of oil.

“Some of it is related to the Crown permit expiry window, on March 30. It’s often busy at this time of year, with companies trying to keep up with expiries,” said Copeland. “We have 40 drilling rigs in the area. That’s, historically, a pretty good number. Not as high as the 90 or 100 rigs a couple of years back, but if you look into the history, if you were running 35 to 40 rigs in the mid-2000s was a good number.”

One of the biggest challenges Copeland finds in the industry these days is getting critical services, such as fracking crews. He noted that finding companies to provide those services can be more difficult, now that there are fewer contractors at work in the oilpatch.

“We’ve had trouble getting fracking services. Sometimes, you end up waiting. It’s not nearly as bad as it was two or three years go, but certainly, it’s challenging at times,” he said.

“Contractors are trying to net as much work as they can, and work efficiently. Frack crews are harder to get right now. A lot of that equipment is up in northern Alberta right now, where it’s getting busy.”

Al Biette, a manger with Future Energy Services Ltd. is not convinced there is any light at the end of the tunnel for the industry yet, and said he has not seen any evidence of an increase of activity.

“I think the recovery of oil is still a year away. We need to see (a price per barrel) in the low $60s for a consistent time, before there’s any increase in activity,” said Biette.

Copeland’s thoughts on the matter echoed Biette’s position. Copeland noted an ideal price per barrel he’d like to see, to ensure growth in the industry would be around $70 a barrel.

Biette said, “That’s not beginning right now. It’s still a ways away. Everyone has a bit of money they’re using up in the last quarter, to try and see a bit of activity because of that, but oil prices aren’t any stronger now than they were two months ago.”

Jeff Richards, vice-president of strategic development at Southeast College, said there has been a decline in enrolment in courses and classes associated with the oil and gas industry since the decline in activity.

Copeland said, “We’ll see what happens, come summertime. If it’s still busy, we’ll know that our oilpatch is back, for lack of a better term.”

© Copyright 2017 Estevan Mercury

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