Canadian Oil, Gas Producers Plan to Drill 8% More Wells in 2024, Riding Pipeline Expansion Wave

(Reuters) — Canadian oil and gas producers will drill 8% more wells in 2024 to take advantage of greater access to pipelines, with the Trans Mountain oil pipeline expansion due to open, an industry group said in an annual forecast on Friday.

Conventional oil production accounts for a small portion — 14% on average this year — of Canada's overall crude output, which comes mainly from oil sands.

Canada is the world's fourth-largest oil producer.

Producers will drill 6,229 wells next year, up 481 from 2023, the Canadian Association of Energy Contractors predicted.

Most of the increased drilling will likely happen in the second half of 2024, as the industry rebounds from a softer market in the recent third quarter, the association said. The Trans Mountain expansion is scheduled to start shipping crude late in the first quarter of 2024, while the Coastal GasLink is approaching mechanical completion.

Capital discipline by producers is likely to cap growth in drilling, the association said.

A tight labor market remains a major challenge, the association's CEO, Mark Scholz, said.

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