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Flooding shuts down oil industry

Overland flooding has choked off the oil industry in Manitoba, grinding it to a complete halt.

During the week ending July 14, there were no tongs swung, no pipe tripped and no wells drilled as none of the 20 rigs in the province worked.

Steve George of 3-Way Power Tongs in Virden has been staying busy running casing for wells in Saskatchewan, where 69 of the 149 rigs in the province are working.

“The further west you go, the better it is,” George said.

Typically, rigs in Manitoba are working sometime in May or by the first week of June at the latest, he said.

“The weather really sucks,” George said. “It’s pretty slow everywhere in Manitoba and it really hurts us.”

Dan MacLean, chief executive of Winnipeg-based Tundra Oil & Gas Ltd. — the largest player in the southwestern Manitoba oilpatch — said this has been one of the worst years for weather delays in the more than 30 years Tundra has been active in the oilpatch.

That comment was echoed by the president of one of the smaller players — Virden-based Antler River Resources.

“I’ve seen more water issues in the last four or five years than ever before,” said Murray Cameron, who has also been working in the oilpatch since the early 1980s.

“But we’ve never had bridges taken out like we’ve had this year,” he added.

During the height of the most recent crisis — from June 28 to July 5 — more than 90 per cent of Tundra’s 2,000 wells were shut down.

And no new wells were being drilled because the ground was either too wet or the well sites were inaccessible due to damaged roads and bridges.

MacLean said the company has been gradually bringing wells back into production since July 5, and hopes to have all 2,000 back in operation by early next week. Company officials are crossing their fingers Tundra also will have its six drilling rigs back in operation by the middle of next week.

“We have to get permission from the (rural municipalities) and the Department of Highways to use RM roads and Manitoba highways for this heavy equipment,” MacLean said.

“If we get more (substantial) rain and road conditions deteriorate further, we could be delayed. We are hoping for dryer, warmer weather.”

He said rain delays are not uncommon in the oilpatch, noting last year periods of heavy rain temporarily shut down production at some of its wells. This year, the flooding is more widespread so more wells have been affected.

The Manitoba government said 75 to 85 per cent of the wells in the Waskada-Pierson area have been affected by flooding this summer. It said another oilpatch player — Corex Resources Ltd. — had 40 per cent of its oil wells out of commission during the flood.

“How long production is shut-in and when drilling activity will recommence will depend on weather, ground and road conditions and will be evaluated on a case by case basis,” it added.

The government has told drivers to assume bridges may be damaged on all roads, restricting weight limits to 10 tonnes. Those restrictions would make it impossible to move any rig over bridges.

It also said the financial blow to the industry won’t be known for another two months, when the next production numbers have to be submitted.

While many of the companies operating in the oilpatch have been negatively affected by this year’s flooding, they’re not the only ones hurting.

Area residents who work in the oil field are also hurting.

Pierson resident and independent contractor Kevin Dekeyser, who helps prepare well-drilling sites, has gone nearly two months without a regular paycheque because roads were too wet or too damaged for trucks to haul equipment to the drilling sites.

So the married father of two has been grabbing odd jobs whenever he can to bring some money in.

“The last couple of weeks, I’ve been fixing roads with a backhoe. So it’s been nice. But I’ll do pretty well anything.”

Dekeyser said it’s so wet he figures it could be fall before he’s back working on oil-drilling sites.

“I might get a job here and there ... but probably nothing steady until freeze-up.”

Virden Mayor Jeff McConnell said because the oil industry is one of the main economic drivers for the area, many of the town’s residents and businesses are being hurt, directly or indirectly, by the interruption in oil production and drilling activity.

That includes people who work in the oil field and don’t get paid if they’re not working, equipment and parts suppliers, electrical companies and hotels and restaurants.

MacLean said although most of Tundra’s wells were out of production for at least a week and its drilling program is nearly a month behind schedule, the company hasn’t laid off any of its more than 200 oilpatch employees.

“This is just a short-term thing. We have people helping out in many other ways,” he said.

“We live and work in these communities and we’re trying to support these communities.”

He said company officials still hope to drill about 220 new wells this year, even though only 60 have been done so far.

“We’ll probably have to bring in another (drilling) rig or two if they’re available, but we’re going to shoot for it.”

» ctweed@brandonsun.com, Winnipeg Free Press

» Twitter: @CharlesTweed

Republished from the Brandon Sun print edition July 16, 2014

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Overland flooding has choked off the oil industry in Manitoba, grinding it to a complete halt.

During the week ending July 14, there were no tongs swung, no pipe tripped and no wells drilled as none of the 20 rigs in the province worked.

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Overland flooding has choked off the oil industry in Manitoba, grinding it to a complete halt.

During the week ending July 14, there were no tongs swung, no pipe tripped and no wells drilled as none of the 20 rigs in the province worked.

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