But that’s a long time if you don’t have an income.
Conditions in Canada’s oilfields are so dire “the last two drilling seasons were pretty much nonexistent,” said Mark Salkeld, president of the Petroleum Services Association of Canada (PSAC).
In one of two energy sector forecasts made public Thursday, the drilling industry association predicted conditions will get worse this year, with only 3,315 wells expected be drilled in Canada, down by 1,835 wells from expectations last November. In 2014, 11,204 wells were drilled.
“What a lot of people don’t realize is when the oil and gas sector is not working, oilfield services companies are tools-down and there is no cash flow,” Salkeld said in a statement. “This is unlike our customers, the producers, who can still generate some revenue, however dismal, from production,” he said.
The board expects WTI to rise from US$39 per barrel in 2016 to US$65 by 2020. It projects Western Canadian Select (WCS), the benchmark for Canada’s crude bitumen blend, will increase from $35 per barrel in 2016 to $63 by 2020.
Lack of export pipelines could mean lower realized prices for Canadian oil and the cancellation of projects altogether, the board said.
On the gas side, producers are also facing another year of tough conditions, the board predicted.
Collective losses will continue in 2016, nearly matching the $1.1 billion lost in 2015, but the sector will return to profitability in 2017, reaching healthy profit levels — $1.2 billion – in 2020.
Revenue will also rise, from $15 billion in 2016 to $24 billion in 2020.
The board doesn’t expect the liquefied natural gas industry to start exporting by 2020.
“While the LNG market is expected to expand over the forecast, a slew of new liquefaction projects, primarily in Australia and the United States, are slated to come online,” the board said. “Unfortunately, prospects for Canadian LNG export projects continue to fall behind in the LNG race, given a series of recent setbacks and further potential delays.”