CALGARY (CP) — Canada’s oilpatch expects an increase in activity this year, with companies drilling more shallow, easy-to-access wells to take advantage of high oil and gas prices. A total of 17,500 wells are expected to be drilled in 2003, or an 11-per-cent increase over last year, said the Petroleum Services Association of Canada, which represents the service, supply and manufacturing sectors of the energy industry. ‘‘Producers drilled more shallow gas wells than anticipated in the fourth quarter of 2002,’’ association president Roger Soucy said Thursday in a release. ‘‘We forecast this trend will continue as commodity prices are expected to remain strong for the remainder of the year.’’ According to numbers released at the same time by Calgary-based FirstEnergy Capital Corp, drilling in 2002 dropped 13 per cent to 15,700 wells. But this was still the fourth largest tally for Western Canadian drilling. More disconcerting, however, was that utilization rates for rigs fell to their second lowest level in 10 years — even though both oil and gas prices rose considerably in the second half of 2002. Jason Konzuk, an energy service industry analyst with FirstEnergy, blamed the decrease in rig activity on the spiralling cost of replacing reserves. ‘‘The chief reason why you had a disconnect with activity in the second half of 2002 is the economics of drilling for gas in Western Canada and the escalation of finding and development costs.’’ Konzuk said companies need to see natural gas prices higher than $3.75 US per thousand cubic feet of gas to deliver cost-of-capital returns. And while gas prices have been significantly higher of late — around $5.60 US per thousand cubic feet this week — capital expenditure programs for both 2002 and 2003 were built assuming much lower prices. ‘‘As producers gain more comfort that the bar has been raised on the longer-term price of natural gas, we should see spending increase from current levels,’’ said Konzuk. FirstEnergy predicted 18,300 wells will be drilled in Canada for 2003, with rig utilization averaging about 49 per cent. The services association said while the winter drilling season was delayed about six weeks due to unseasonably mild weather in December, rig utilization was at near-record levels in January. And Soucy said deeper gas drilling in the foothills, northern Alberta and northeastern B.C. should continue this year. ‘‘This bodes well for the service sector in 2003.’’