Oil and gas drilling sector expects activity to pick up in 2023

CALGARY – The organization representing Canada’s oil and gas drilling sector says it expects more activity in 2023, even as it continues to push the federal government for a new tax credit it says it needs to help the energy sector decarbonize.

At its state of the industry conference Wednesday, the Canadian Association of Energy Contractors (CAOEC) said it expects 6,409 wells to be drilled in Canada in 2023, an approximately 15 per cent increase from 2022.

It predicts 42,350 people will be employed directly and indirectly by the drilling sector in 2023, an increase of more than 5,400 jobs year-over-year.

The industry group said it expects a boost next year from the completion of the Trans Mountain pipeline expansion and the Coastal GasLink project, both of which will increase Canadian oil and gas capacity.

Mark Scholz, the organization’s CEO, said the energy transition is also creating opportunity for drillers in areas such as helium, carbon capture utilization and storage, in-situ hydrogen, and mineral extraction from oilfield brines.

But he said in order to capitalize on the opportunity, the industry has requested the federal government create a 50 per cent refundable tax credit for drillers to enable them to develop and deploy new carbon abatement technologies.

Scholz said he was encouraged by the recent fall federal economic statement, in which Finance Minister Chrystia Freeland indicated her interest in keeping Canada competitive with the U.S. and its Inflation Reduction Act, which contains a number of incentives for industries looking to reduce their carbon emissions.

“We remain actively engaged with the federal and provincial governments to move this important policy initiative forward,” Scholz said in a discussion of the forecast.

Scholz said labour recruitment and retention remain a challenge to overcome in the energy industry.

Feature image by iStock.com/photofellow