Saskatchewan’s oil industry is getting back to business, with the government reporting a major uptick in oil drilling this year.
In the first three months of 2017, the government said in a press release, 856 oil wells were drilled in Saskatchewan – more than double the numbers for the same time in 2016.
Trevor Tombe, an economist at the University of Calgary, said the trend is a response to stronger oil prices, which have stabilized at about $53 US for the benchmark West Texas Intermediate.
“What’s driving this is, of course, the oil price. This isn’t really a story of differences in government policy,” he said. “I think there’s a lot more confidence that the instability is over, even though we’re still in a low price environment.”
Tombe said Alberta is showing precisely the same trend in its drilling activity.
“If you just plot the two provinces and their movement,” he said, “they line up very tightly.”
Tombe said the rally is substantial. But he pointed out that the province is bouncing back from a very low bottom.
“We should keep in mind that the beginning of 2016 was a historically bad period for the industry.”
For more on this story, see the April 11 print or e-edition of the Daily Herald.