In the Oil Patch, It Can Change Quickly: One Man's Opinion

Tuesday, September 11, 2007 03:45 AM

It happens quickly and it has happened before, the oil patch suddenly takes a full stop.

That’s the case from Calgary through to Ft St John, Ft Nelson and all the area in between.

Drilling (according to the business leaders in Ft St John) is acknowledged as the center of activity in BC. has dropped about 40%. Analysts say it is because the costs to drill have gone up while the price for natural gas has fallen.

Prince George companies doing business in that region, said they are trying to move as quickly as possible out of the Oil and Gas industry and in to the mining industry which has been growing steadily in the central and northern part of BC.

Oil industry officials are reluctant to say just how long the slump will be, beyond saying that the industry needed a correction and it is coming now. The cost of doing business they say was increasing too rapidly and the price of natural gas has been dropping. Added to that the cost to produce Canadian oil is larger than off shore oil and the major companies are content at this time (in a fairly stable world market) to tap sources in the world markets.

As to what is taking place in the PG region, there has been not one single exploratory or drilling permit issued for any development of gas and oil in spite of the provincial government being prepared to put up taxpayer money in order to get some drilling under way.

The oil and gas industry could be the next to suffer the kind of pain already being experienced by the forest industry in the province.

I’m Meisner and that’s one man’s opinion.

Previous Story - Next Story

Email |

Print |

Facebook |

Twitter |

Digg |

Del.icio.us

Posted on Tuesday, September 11, 2007 03:45 AM in Views by 250 News

Return to Home

Comments

Posted by: dgdiggler on September 11 2007 8:19 AM

What kind of companies from the prince george area are involved in Drilling, Ben? Are they basically support companies to the oil and gas industry?

Posted by: Palopu on September 11 2007 12:14 PM

So much for the great exploration for Oil in the Nechako Basin. This should be a surprise to no one.

Posted by: metalman on September 11 2007 3:41 PM

There are a number of P.G. companies supplying goods and services to the N.E. oil and gas sector, and at least one local company (Falcon Drilling) that travels there and all over the world doing test drilling (mainly for mineral exploration as I understand it) There has been quite a push in the last year and a half to get P.G. companies recognized in Ft. St. John and area as viable suppliers to the oil and gas industry. The thinking was that existing supply and service vendors up there were maxed out in their ability to adequately service the demand and were, in the opinion of the purchasers, charging more than they should. This was ostensibly the reason why they were considering PG as a source.
metalman.

Posted by: Runner46 on September 11 2007 4:29 PM

That and price.

Posted by: lunarguy on September 13 2007 7:52 AM

As someone who owns one of the oil service company in Fort St. John trust me no one in the industry looks towards PG as a service / supply location of any major value. It is hard enough to get the oil companies to buy stuff in Fort St. John as so many of them have a large field office in Grande Prairie and think nothing of sending someone to drive across the border and buy supplies there, without the 7 % PST. The suppliers in FSJ can more than supply the demand of the area and are looking at, if the exploration heads to PG, of moving down here as they already have the required contacts and knowledge in the area.