Manitoba oil patch businesses praying for higher prices

Businesses in southwestern Manitoba are feeling the pinch from the low price of oil. 

Oil closed Friday below $30 a barrel for the first time in 12 years.

It's a figure Jason Schmecht watches closely from his office near Pipestone, Man. Schmect is the Manitoba operations manager for Spearing Services, a company that supplies a wealth of services and equipment to the oil field. 

"Both the community and our workforce ... we've all felt that fear. Do we have a job coming up? What's the oil price going to do?" he said.

At the height of Manitoba's oil boom, you'd be hard pressed to find a piece of equipment in the yard, nestled in at the corner of Highways 2 and 83. But today, rows of equipment sit idle while few workers tend to what little work needs to be done. 

"As it stands right now, we're hearing anywhere from 20-100 wells [will be] drilled this year compared to the 300-400 usually drilled," Schmecht added. 

He said the company has largely been able to avoid layoffs by shuffling employees around to other areas of the company. But if oil drops so low that the major companies his organization is contacted by stop working, he may have to do so as well. 

Schmecht said the company has seen a more than 25 per cent reduction in their workload so far. He predicts it could drop another 25 per cent before it's all said and done. 

Down the highway in Reston, Man., business owner Don Kim is another businessman who hopes the price of oil picks up again. 

"Our business mainly focuses on the oil crews," Kim said while standing in an empty bar at the Rest'n Inn along Highway 2. "It may impact the business a lot."

Kim bought the hotel last December and experienced a busy nine months. But now, with a new restaurant set to open soon, he's hoping business picks up so he and his wife can hire some staff. 

For other business owners in the small village, however, the downturn has given them a chance to step back and breathe.

"Our businesses were successful even before the oil industry came here," said Tanis Chalmers, economic development manager for the Rural Municipality of Pipestone. "They are still busy due to the main population." 

Chalmers said the downturn has also given the municipality time to prepare for the future. That's something that wasn't easy to do when they were busy preparing lots for some of the 35 new homes that have been built in the municipality in the past six years. 

"Everybody rides the cloud and nobody thinks it'll ever happen here," Schmecht said. "Everybody checks that price of oil in the morning and everyone checks it before bed." 

"We've been through this before in other areas. We'll ride it out."