Canada’s oil and gas drilling sector is on track for its busiest year since 2018, according to an industry association.
But new forecasts suggest less work ahead for the rigs and workers behind it.
The Canadian Association of Energy Contractors (CAOEC) expects 613 fewer wells to be drilled in Alberta next year, a decline of about 13 per cent from its 2026 estimate.
The projections, presented Friday in Calgary, come as Alberta Premier Danielle Smith and industry leaders push to expand energy production — highlighting why growth in the oil patch doesn’t necessarily translate into more drilling jobs.
A busy year, followed by a pullback
CAOEC expects 4,575 wells to be drilled in Alberta this year, compared with 3,962 in 2027.
Across Western Canada, drilling is forecast to decline from 6,559 wells to 5,900.
Alberta accounts for more than 90 per cent of that projected decrease.
The association also expects fewer drilling and service rigs to be working across Canada over the next three years.
But Mark Scholz, CAOEC’s president and CEO, doesn’t see the outlook as a warning sign.
“This is, I would say, a very healthy market right now,” Scholz told reporters.
He says some types of drilling rigs are already in short supply heading into winter, while finding enough workers could become another obstacle if the industry expands.
The association’s projections are based on a mid-case scenario for oil and gas prices, investment and other economic conditions. Actual drilling activity could be higher or lower.
Why more oil doesn’t necessarily mean more wells
The explanation isn’t just about oil prices. It’s also about how companies drill and where they spend their money.
Peter Tertzakian, an economist whose firm Studio.Energy helped develop the forecast, told the Calgary gathering that technology has changed how the industry operates.
Horizontal drilling and longer wells have allowed companies to reach more oil and gas with less drilling activity than in the past.
But Tertzakian says the industry’s financial priorities have also shifted.
Producers once reinvested much of their available cash into drilling, while investors increasingly expect companies to pay down debt or return profits.
“In other words, the investors started basically saying, ‘Give me my money back, and I’ll decide with you whether or not to put the money back in the ground,’” Tertzakian said.
That helps explain how production could increase without a corresponding rise in drilling activity — and why stronger industry earnings don’t automatically mean more drilling jobs.
What about the jobs?
CAOEC estimates drilling and well-servicing activity will support 86,326 direct and indirect jobs across Canada in 2026, compared with a projected 79,504 in 2029.
That’s approximately 6,800 fewer jobs supported annually by 2029.
The forecast does not mean 6,800 people are expected to be laid off.
The figures estimate employment supported by rig activity, including jobs with suppliers and other businesses. CAOEC does not project layoffs.
What could change the forecast?
Smith, who addressed Friday’s industry luncheon, pointed to proposed pipelines, expanded natural gas exports and government efforts to encourage investment as opportunities for future growth.
But she acknowledged that years of changing expectations have left some companies cautious about expanding.
“I understand there’s a little skepticism, because of the whipsaw effect that you suffered over the past 10 years,” Smith said.
The premier stressed that companies had spent years paying down debt and returning money to shareholders after being told demand for fossil fuels would decline. Now, she said, governments are encouraging them to increase production.
She pointed to efforts to help producers recover certain investment costs sooner as one way to encourage additional production.
Scholz remains optimistic about what comes next. Under the association’s high-case scenario, Western Canada could drill nearly 8,000 wells in 2029, compared with approximately 5,800 under its mid-case forecast.
That stronger outcome depends on favourable market conditions, investment and new infrastructure.
“But buckle up. It’s going to get very busy in this sector,” Scholz told reporters.
For now, though, CAOEC’s central forecast points to fewer wells being drilled in Alberta next year — and fewer jobs supported by drilling and well-servicing activity nationally by 2029.
