Drilling group to issue 2016 forecast against backdrop of oil price rout

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CALGARY – A drilling industry group will be offering a glimpse later today into what 2016 may look like in the oilpatch.

And if next year is anything like 2015, the outlook from the Petroleum Services Association of Canada won’t be pretty.

The PSAC twice revised downward its 2015 outlook as the oil price doldrums took their toll on companies that provide drilling and other services to oil and natural gas producers.

Most recently, the PSAC called for 5,320 wells to be drilled across Canada this year – a 47 per cent decrease from its original estimate in October 2014.

U.S. benchmark crude prices are currently at around US$46 a barrel – below what many producers need to make ends meet.

The Canadian Association of Petroleum Producers has estimated 36,000 jobs have been shed in the oil and gas industry this year, mostly in Alberta.

It’s been estimated that each active drilling rig represents 135 direct and indirect jobs. So when oil and gas producers slow activity, it means less work for companies that are hired to operate drilling rigs and haul equipment.

And for the work that is still being done, producers are putting pressure on service providers to lower rates.

At the event later Tuesday, PSAC president Mark Salkeld will be joined by a representative from CAPP, which represents oil and gas producers, and industry analysts.