Oilpatch faces major job cuts

An oilpatch trade association is warning that deep cuts in the petroleum services industry are imminent.

“Drilling activity in the first quarter is down from last year, and it’s looking like come March or April, things are going to be pretty grim,” said Petroleum Services Association of Canada president Roger Soucy in a news release.

“Without healthy drilling activity, there’s just no work for this segment of the industry, and without work, there are no jobs.

“There are a lot of people in the province of Alberta whose jobs are at stake — not just directly in the industry, but in all cities and towns where industry and workers support hotels, coffee shops, restaurants, stores and countless other businesses.”

PSAC estimates that the petroleum sector, which includes drilling, service and geophysical contractors, employs more than 100,000 Albertans.

Another concern is that skilled workers who are displaced won’t return.

“If we lose these workers, and likely a number of companies as well, it will become very difficult to recruit new people. That means, when the economy is poised for a turn-around, there simply won’t be the manpower and expertise to keep Alberta’s economic engine churning.”

On Thursday, the provincial government announced an incentive program for the industry. Soucy said his organization welcomes the help, but added that the main issue is the economics that currently make exploration and drilling impractical.

“Until commodities recover, the only way to protect jobs, and our economy, is to create an environment where it is economical for producers — big and small — to keep drilling wells.”

PSAC represents more than 270 companies with more than 62,000 employees in the petroleum services industry. Last week, it projected that there will be 21 per cent drop in drilling activity in Canada this year, and a 27 per cent decline in Alberta.