Don’t Write Off the Oil Patch

Despite all the talk about climate change and the effects of carbon emissions with a new United Nations report this week, no one is writing the epitaph of this province’s petroleum industry.

The provincial government has just completed its third auction of drilling rights for 2021 and it raised more money than any of the bi-monthly auctions in almost two years – a signal that the optimism levels being displayed by the industry are improving.

With oil prices sitting in the $60 range, demand continues unabated as we get back to travelling as COVID restrictions are eased and global economic activity rebounds. That demand is pushing prices upward which, in turn, are encouraging producers to add to their asset base by acquiring the rights to explore or drill.

The bulk of the activity is, as usual, in the southeast corner of the province but there was an interesting developing in this bid process with considerable level of interest for rights in the Arborfield district which is well outside what we consider the traditional oil fields of Saskatchewan.