Capital spending in Canada's oil and gas industry will drop by more than half by the end of 2016 as compared to 2014, according to a forecast released by the Canadian Association of Petroleum Producers.
In 2014, capital spending in the oil and natural gas sector amounted to $81 billion. In 2016, that number is set to drop to $31 billion, as companies continue to cut back because of persistently low energy prices.
The total number of wells drilled in Western Canada this year is forecast to decline to 3,500, from 10,400 in 2014.
CAPP is calling on "urgent action" so that the industry remains competitive.
"Canada needs urgent action to remain a competitive market for oil and gas investment, and to be competitive relative to other oil and natural gas producing jurisdictions," Tim McMillian, CAPP's chief executive, said in a news release
Specifically, CAPP is looking for some movement on the pipeline issue, saying Canada remains hampered by dependence on just one customer, the United States, which itself has started to export oil.
"The United States, our only customer and No. 1 competitor, is certainly not standing still," McMillan said.
