As Canada’s 150th birthday approaches on July 1, the growth of the oil and gas services (OGS) industry in the past 50 years is noteworthy. While oil companies get the attention, OGS does the work, supplies all the equipment and most of the people.
Drilling -To 1967, Canada’s centennial year, 47,722 wells had been drilled. The first oil well was at Oil Springs, Ontario in 1858 predating Confederation. The first gas well was at Langevin near Medicine Hat in 1883. By 1967, the industry was drilling nearly 3,000 wells per year and 3.9 million metres of hole. The record year for drilling was 2005 with 25,068 wells and 29.9 million metres. But of the 529,778 cumulative wells drilled in Canada to the end of 2016, 91% were drilled in the past 50 years. In 1977, there were 340 drilling rigs in the fleet (latest figures available) but the peak was in 2008 at 863. The past 50 years have seen a massive expansion of the OGS sector.
Production – Canada is the fifth largest producing country in the world on a barrel of oil (boe) equivalent basis estimated by the ARC Energy Research Institute to exceed 7 million boe/day this year. Only the U.S., Russia, Saudi Arabia and Iran produce more. In 1967, Canada produced about 1.12 million barrels of liquids daily including oil, condensate, pentanes plus, propane and butane. This figure grew to 4.4 million b/d by 2016, a 390% increase. Natural gas output was 3.4 bcf/day 50 years ago, only 23% of 14.9 bcf/day last year. The biggest impact came from oil sands after Great Canadian Oil Sands (now Suncor) began producing in 1967. That year, only 1,050 barrels were produced daily. By 2016, output was 2.4 million b/d. An entire new OGS industry was created to build, operate and support oil sands production.
Operating – The growth years for keeping oil and gas producing in 1967 were in the future. While there were 16,067 producing oil wells in 1967 compared to 78,213 in 2015, the big expansion was in gas wells and oil sands production. In 1967, there were only 2,153 active gas wells compared to 140,010 last year. In 1967, CAPP reported oil sands operating costs at zero. This skyrocketed to $21.8 billion in 2015. Operating costs for conventional production were $1.3 billion (in 2015 dollars) in 1967, barely over 5% of $21.8 billion in 2015. Today, Alberta alone has over 30,000 oil processing facilities and nearly 21,000 gas plants requiring continuous maintenance and supervision. Keeping what we’ve got going has required enormous growth for OGS, today a key element of the economy of every community close to production.
Technology – Except for pipe threads which were standardized by the American Petroleum Institute in 1924 (too many things didn’t screw together prior thereto), almost everything else has changed in the past 50 years. But since 1967, the single greatest technical advancement impacting the industry today is the horizontal wellbore, developed and commercialized in Canadian reservoirs in the early 1980s by Imperial Oil and its suppliers. Today’s light tight oil and liquids, shale gas and SAGD production owe their existence to horizontal drilling, completion and production, today entirely the domain knowledge of OGS.
#PSAC #Canadaian #Oilandgas #oil #OGS #shalegas #drilling
