CALGARY, Alberta, Jan 28 (Reuters) - Canadian oil and gas drilling could fall 21 percent this year because of slowing petroleum demand and low commodity prices, the Petroleum Services Association of Canada said on Wednesday.
The association, which represents Canadian oilfield service firms, said it expects 13,500 oil and gas wells to be drilled in 2009, down from 17,043 in 2008, and 46 percent below the record 25,000 wells drilled in 2005.
PSAC President Roger Soucy attributed the drop in activity to falling oil and gas prices, which have tumbled as the global economic downturn cuts demand for fuel.
"The world's rapid decline into recession has reduced demand for all commodities, including oil and gas. This has triggered a dramatic deterioration in commodity prices for oil and natural gas, leading to a significant reduction in related field activity in Canada," Soucy said in a statement.
Only British Columbia will see a rise in drilling activity as producers rush to exploit promising new unconventional natural-gas plays like the Horn River shales and the Montney sands.
Activity in British Columbia is expected to rise 7 percent this year to 905 wells. In Alberta, the heartland of Canada's oil and gas industry, drilling will fall 27 percent from 2008 to 8,455 wells.
Manitoba and Saskatchewan will also see drilling fall from last year, with the association forecasting Saskatchewan drilling easing 5 percent to 3,805 wells and Manitoba sliding 13 percent to 250 wells.
PSAC said it expects oil prices to average $50 per barrel in 2009 while Canadian gas prices at the AECO hub in Alberta will average C$5.50 per thousand cubic feet. (Reporting by Scott Haggett; editing by Rob Wilson)