November 8, 2011 / 6:30 PM / 6 years ago

Small rise seen in Canada oil/gas well count in 2012

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CALGARY, Alberta (Reuters) - A shift in Canada to more complex oil and gas drilling and a shortage of skilled labor are expected to result in just a small increase in the number of wells drilled next year, the country's drilling contractors said on Tuesday.

The Canadian Association of Oilwell Drilling Contractors forecast a total of 12,672 wells would be drilled in Western Canada, up 1 percent from an expected 12,555 in 2011.

With persistently weak natural gas prices, explorers and producers are directing more spending to oil and liquids-rich gas trapped in shale rock, which requires horizontal drilling and hydraulic rock fracturing techniques.

"With the increasing complexity of the wells and the associated time to drill them, as well as shortage of experienced crews, the association does not anticipate a significant increase in the well count for 2012," it said in a statement.

Last week, the association representing Canada's oil field service companies said it expected a more optimistic 10 percent increase in the Western Canadian well count.

The CAODC said the industry suffered a big loss of trained crews as drilling slowed down during the economic downturn of 2009 and has had a hard time rebuilding the work force.

"While the numbers of new workers joining industry is encouraging, it will take time to develop their skills,' the CAODC said. "In addition to outside labor competition, the drilling rigs lose many skilled people to positions within industry, particularly specialized positions like directional drilling."

In terms of rig usage, 55 percent of the country's fleet is expected to be operating on average through the year, a similar percentage to 2011. However, the fleet is expected to grow by 35 rigs from today, the group said.

Reporting by Jeffrey Jones; editing by Peter Galloway

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