Oil & Gas

Oil & Gas Industry in Southeast Saskatchewan

Oil and gas is an integral part of Saskatchewan’s economy, accounting for about 18% of provincial Gross Domestic Product. In the Saskatchewan south east region it is the major economic driver accounting for $553 million annually in revenue, or 38.08%, of the $1.4 billion in oil and gas revenue the province generated through royalty tax and land sales in 2009.

The Saskatchewan government maintains an Oil & Gas Information map.

Provincial Activity in Surveying and Drilling

  • In 2010, the industry invested over $10 billion in exploration. (2010 Energy and Resources)

  • Over 10,000 horizontal oil wells have been drilled to date in Saskatchewan and oil production from horizontal wells now makes up almost one-half of provincial oil production. (2010 Energy and Resources)

  • Approximately 27,000 oil wells were productive in 2010. (2010 Energy and Resources)

  • In June 2010 the Saskatchewan government introduced a new volume-based gas well incentive which establishes a maximum Crown royalty rate of 2.5% and a freehold production tax rate of 0% on the first 25 million cubic metres of natural gas produced from all horizontal gas wells drilled between June 1, 2010 and March 31, 2013.

  • Saskatchewan currently produces 425,000 barrels of oil per day.  The province is Canada’s second largest crude oil producer, making up about 17% of national production. (2010 Energy and Resources)

  • 86% of Saskatchewan’s 43 billion barrel reserve of conventional oil remains in the ground. Now, advanced techniques are also being developed to pursue non-traditional oil reserves in the northern oil sands, oil shale, and coal shale deposits.

Southeast Saskatchewan Regional Activity in Surveying & Drilling

  • Regionally, 497 businesses are either directly involved in the oil patch through drilling and production, or indirectly involved through consulting, supply and servicing the industry’s needs. (2009 Energy and Resources)
  • In 2010, 1,531 horizontal wells were drilled in the south east. As of June 2011, the region was up 23% in the drilling of horizontal wells over the same point in 2010. (2011 Energy and Resources)

South East Saskatchewan Regional Activity in Production

  • Of the $553 million in oil and gas revenues in the Saskatchewan southeast in 2009, $478.3 million can be attributed to oil activity, $1.0 million to gas sales, and $73 million to land acquisition for gas exploration.

  • The number of oil producers in the region fluctuates from 85 to 120. This fluctuation is largely the result of constant mergers and acquisitions.

Employment Provincially & Regionally

  • In 2009 the Oil and Gas sector in Saskatchewan employed either directly or indirectly over 35,000 people.

  • It is estimated that in 2010 about 15,000 people were employed directly or indirectly by the Oil and Gas sector in the southeast Saskatchewan region.

An Untapped Resource

Drilling for oil in the southeast region of Saskatchewan has had an unexpected spinoff. Resevoirs of associated gas in liquid form have the potential to become a high-priced commodity that will have demand in the future for the production of plastics among other products. Though the industry is in its infancy and the technology to extract and use this resource is still being developed, it is a readily available, untapped resource in the region.

Bakken Success in Southeast Saskatchewan

Today, advances in technology have balanced the cost of drilling and production with the ability to extract more oil. It has become much more feasible to proceed with horizontal drilling as a profitable pursuit. And as the technology expands the drilling and extraction will become more profitable.

The northern tip of the  Bakken Basin enters southeast Saskatchewan, providing the region with a wealth of oil resource. Bakken oil wells are yeilding high quality light crude oil, at production and royalty costs considered very competive with other western Canadian jurisdictions. The light crude is a premium product because it is easier to refine than many other forms of oil.

Horizontal drilling proceeds as though establishing a traditional well. A hole is drilled vertically to a depth of at least one mile to a point just under the deepest fresh water near the surface. The drill bit is removed, a casing is added and cement is poured into the casing to prevent contamination of the surrounding fresh water aquifer. Drilling proceeds again to a depth 500 feet above the planned horizontal well, a location known as the kickoff point. At this point angled drilling begins and continues until the well hole becomes horizontal.

Fracing on the well is introduced to create cracks or fissures in the shale. Multi-stage fracing is a more recent innovation. Several additional technologies are utilized to recover oil at this depth: the use of water (hydro) pressure to force the oil to the surface, and enhanced oil recovery using pressurized CO2. An informational video explaining the process can be found on the Northern Oil & Gas, Inc. website www.northernoil.com/drilling

 

 

Support Services, Associations & Organizations

  • Association of Consulting Engineers of Canada (ACEC) ACEC is a national association of consulting firms that provide engineering and other technology-based intellectual and professional engineering services to the private sector and government. ACEC´s mission is to promote the business and professional interests of the Canadian consulting engineering industry in Canada and abroad.

  • Canadian Association of Oilwell Drilling Contractors represents Canada’s drilling and service rig contractors. The organization provides training, industry profiles and access to on-line publications and research library.

  • Canadian Association of Drilling Engineers this organization supports a large spectrum of specialists and offers the opportunity of a dialogue and sharing experience for its members.

  • Canadian Association of Petroleum Producers (CAPP) is the voice of Canada’s upstream oil and natural gas industry. CAPP provides research, resources, publications, and topical updates on activities in the oil and gas sector.

  • Canadian Petroleum Safety Council (CPSC) is the safety association for Canada’s upstream oil and gas industry. Its mandate is to develop safe work practices through a range of safety services and resources, including Industry Recommended Practices (IRPs), safety alerts and updates, COR certification and Petroleum Safety Conferences.

  • Desk and Derrick of Southeast Saskatchewan is an organization whose purpose is to “Promote the education and professional development of individuals employed in or affiliated with the petroleum, energy, and allied industries.” Southeast Saskatchewan contact: Wendy May Clark (306) 634-6684

  • The Estevan Oilfield Technical Society (OTS) is a non-profit organization made up of local oilfield personnel. Designed to unite oilfield workers in the local area through social events and to provide a means to give back to the community in which they were employed, the society holds major functions through-out the year and promotes community involvement.

  • Industry Canada link to Canadian Oil and Gas Associations.

  • International Association of Drilling Contractors (IADC) is dedicated to enhancing the interests of the oil-and-gas and geothermal drilling and completion industry worldwide. Membership is open to any company involved in oil and gas exploration, drilling or production, well servicing, oilfield manufacturing or other rig-site services.

  • Petroleum Human Resources Council of Canada provides information on careers and training for the oil and Gas sector.

  • Petroleum Services Association of Canada (PSAC) is the national trade association representing the service, supply and manufacturing sectors within the upstream petroleum industry.

  • Petroleum Technology Alliance Canada (PTAC) acts as a facilitator between those that have problems or opportunities and those that have potential R&D solutions. PTAC brings groups together to identify areas where R&D will make a difference, and to launch specific projects to address these problems or opportunities.

  • Pipe Line Contractors Association of Canada represents contractors in labour relations matters and establishes training courses for the development of Canadian workers in special pipeline construction skills.

  • The Rig Locator provides detailed information and reports on drilling and service rigs in Canada.

  • Southeast Saskatchewan Airshed Association (SESAA) is a non-profit organization of public, industry, government, and non-government members devoted to collecting credible, scientifically defensible air quality data for the southeast Saskatchewan region, and to make this data freely available to all stakeholders.

  • Small Explorers and Producers Association of Canada (SEPAC) represents the unique interests of emerging and junior oil and gas companies, to the public, governments and other sectors of the energy industry.