Canadian oil companies under pressure to prepare for price fluctuations

Extracting oil from unconventional sources, such as Canada’s oil sands, can be costly and resource intensive.

Utilizing unconventional fossil fuel reserves has driven rapid economic development in Canada during recent years. However, the commercial viability of conducting extraction operations in Canada’s “tar sands” has always been inextricably linked to the maintenance of high oil prices.

A sharp drop in the price of crude could burst Canada’s petroleum bubble and leave the country’s producers struggling to maintain profits and make ends meet. There are many factors that influence oil prices and different developments could cause varying effects.

For instance, we recently discussed speculation that California could experience a shale oil boom in the coming years. If current estimates regarding the Monterey Shale’s recoverable reserves prove to be accurate and large-scale extraction begins in earnest, the influx of new supplies could put downward pressure on the price of crude oil.

New competitors are emerging constantly as modern oil production equipment unlocks previously inaccessible reserves. Around the world, many nations – including both established producers and those just getting into the petroleum game – are exploring their potential.

The British government recently ended a temporary moratorium that had been placed on the controversial practice of hydraulic fracturing, or “fracking.” This could open the door for the practice to gain momentum in Europe, where adoption has stalled amidst geographic challenges and environmental concerns.

Beyond the risk of an expanding supply causing a price drop, we’ve also discussed how energy producers that make use of unconventional plays continue to confront significant challenges in the normal course of business, as they seek to complete well-testing, drilling and extraction operations.

One thing that can help producers around the world achieve maximum output from their oil and gas wells is to implement an oil jet pump or an alternative hydraulic lift solution.