More than 110,000 jobs lost

By Geoff Lee

May 3, 2016 6:00 AM

Mark Scholz, president of the Canadian Association of Oil Well Drilling Contractors, spoke about the Oil Respect campaign in support of the industry at a Chamber of Commerce lunch at the Lloydminster Golf and Curling Club Thursday.

Mark Scholz, president of the Canadian Association of Oil Well Drilling Contractors (CAODC), finds himself on the stump across Canada campaigning for his industry.
Scholz represents the Canadian drilling and service rig sector that is reeling from massive job losses since the downturn in the oil and gas industry at the end of 2014.
He told a Lloydminster Chamber of Commerce audience Thursday that, including indirect jobs, more than 110,000 people across Canada have lost their jobs in the oil and natural gas sector
“It’s a very difficult time for businesses,” he said with the drilling rig utilization rate at a low of just 4.2 per cent.
Scholz said there are only about 30 drilling rigs working in Western Canada out of 700 in the fleet during the week of his visit.
He noted service rigs were faring slightly better with their ability to perform maintenance on existing wells.
As for how Lloydminster is faring in the downturn, he said: “Every community is experiencing it a little differently depending on the producers in the areas and their risk appetite for putting in more capital.
“I’ve heard in the Lloyd area there have been some producers who are at least continuing to provide maintenance work for a number of service rigs, but it’s nowhere near what we’ve seen in the past.”
Scholz also noted the day rates service companies are being offered to provide those services are to the point where it’s not sustainable or profitable.
The total number of wells drilled in Western Canada is forecast to decline to 3,500 in 2016, a 66 per cent drop from 10,400 wells drilled in 2014.
With drilling in the dumps, Scholz spoke about CAODC’s Oil Respect campaign at the Lloydminster Golf and Curling Centre.
Oil Respect is a campaign started a few months ago to stand up for Canada’s oil and gas industry.
“The message is about demanding respect for oil families and oil and gas workers,” said Scholz, who added the campaign has three objectives.
The first is to address the misinformation and half-truths that are spread by opponents of the oil and gas industry.
“Secondly, we want to give regular Canadians who support the industry a voice so they can stand up and demand respect for this industry and join the national discussion,” said Scholz.
Thirdly is to remind Canadians that oil and gas produced in Western Canada is behind Canada’s high standard of living and is being developed responsibly.
About pipelines, Scholz said, “Market access is a concern that should be on the mind of all Canadians including our political leaders.”
He said without new pipelines the value of oil and gas produced in Western Canada is discounted because we can’t get it to market efficiently.
“We need to diversify our markets—95 per cent of our products go to a single market (U.S.)— we have to access to international markets,” added Scholz.
“The only way to do that efficiently and safely is through pipelines.”
Scholz calls this the worst downturn since the 1980s and possibly the worst ever, based on comments he hears from people who struggled through that era.
Scholz said what makes this downturn worse than the 80s is the larger size of the industry today.
He said in the 80s there were about 400 drilling rigs in the fleet.
“Today, you have 700 and the utilization and rig count is about the same,” he said.

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