The good news: oil patch spending is on the rise and is expected to reach $40.6 billion in 2024, according to the Canadian Association of Petroleum Producers (CAPP), the country’s largest industry group.The downside is that it comes even as domestic players are ramping up output in anticipation of a pair of pipeline start-ups later in the year. Which is to say they’re taking a wait-and-see approach to future pricing, production and most importantly, government policy.According to CAPP president Lisa Baiton, there is room for “cautious optimism” with current Canadian oil production at record levels in anticipation of the Trans Mountain expansion completion in the second quarter. .“Despite these positive trends, there remains a sense of caution largely due to the ongoing uncertainty surrounding proposed emissions policy in Canada, which continues to be a significant factor in investment decisions.”CAPP CEO Lisa Baiton.Natural gas producers are also looking forward to seeing the completion of Canada’s first globally significant liquefied natural gas export facility in BC, expected in 2025.“Upstream oil and natural gas producers are staying disciplined, with capital expenditures expected to remain stable in 2024,” Baiton said. “Despite these positive trends, there remains a sense of caution largely due to the ongoing uncertainty surrounding proposed emissions policy in Canada, which continues to be a significant factor in investment decisions.”.Conventional oil and gas spending is forecast at $27.3 billion, while oil sands investment is expected to reach $13.3 billion, which is significantly lower than previous years in the absence of new mega projects to grow production.Alberta gets the lion’s share, with a combined $29 billion, while Saskatchewan is forecast to rise from $3 billion to $3.3 billion in 2024, with approximately $500 million allocated to thermal heavy oil projects.In BC, which is primarily a natural gas region, upstream spending is projected to increase slightly to $5 billion in 2024, driven by drilling to supply the massive LNG Canada terminal as the project moves towards its commissioning and start-up phase.In the East Coast offshore, spending is expected to increase to $2 billion from $1.6 billion last year after nearly a decade of stagnant growth. With renewed activity from the likes of the Norwegian state oil company Equinor, CAPP said there remains “significant potential” to see future growth..Depending on price, oil and gas represents about 10% of the Canadian economy, contributing $111 billion in gross domestic product (GDP) and $45 billion in tax revenues and royalties to municipal, provincial, and federal governments across the country.“Energy production and export is the backbone of the Canadian economy,” said Baiton. “Hundreds of thousands of Canadians directly and indirectly rely on the industry for work, enabling thousands of families and businesses, including hundreds that are indigenous owned, to improve their lives and prosperity.”
The good news: oil patch spending is on the rise and is expected to reach $40.6 billion in 2024, according to the Canadian Association of Petroleum Producers (CAPP), the country’s largest industry group.The downside is that it comes even as domestic players are ramping up output in anticipation of a pair of pipeline start-ups later in the year. Which is to say they’re taking a wait-and-see approach to future pricing, production and most importantly, government policy.According to CAPP president Lisa Baiton, there is room for “cautious optimism” with current Canadian oil production at record levels in anticipation of the Trans Mountain expansion completion in the second quarter. .“Despite these positive trends, there remains a sense of caution largely due to the ongoing uncertainty surrounding proposed emissions policy in Canada, which continues to be a significant factor in investment decisions.”CAPP CEO Lisa Baiton.Natural gas producers are also looking forward to seeing the completion of Canada’s first globally significant liquefied natural gas export facility in BC, expected in 2025.“Upstream oil and natural gas producers are staying disciplined, with capital expenditures expected to remain stable in 2024,” Baiton said. “Despite these positive trends, there remains a sense of caution largely due to the ongoing uncertainty surrounding proposed emissions policy in Canada, which continues to be a significant factor in investment decisions.”.Conventional oil and gas spending is forecast at $27.3 billion, while oil sands investment is expected to reach $13.3 billion, which is significantly lower than previous years in the absence of new mega projects to grow production.Alberta gets the lion’s share, with a combined $29 billion, while Saskatchewan is forecast to rise from $3 billion to $3.3 billion in 2024, with approximately $500 million allocated to thermal heavy oil projects.In BC, which is primarily a natural gas region, upstream spending is projected to increase slightly to $5 billion in 2024, driven by drilling to supply the massive LNG Canada terminal as the project moves towards its commissioning and start-up phase.In the East Coast offshore, spending is expected to increase to $2 billion from $1.6 billion last year after nearly a decade of stagnant growth. With renewed activity from the likes of the Norwegian state oil company Equinor, CAPP said there remains “significant potential” to see future growth..Depending on price, oil and gas represents about 10% of the Canadian economy, contributing $111 billion in gross domestic product (GDP) and $45 billion in tax revenues and royalties to municipal, provincial, and federal governments across the country.“Energy production and export is the backbone of the Canadian economy,” said Baiton. “Hundreds of thousands of Canadians directly and indirectly rely on the industry for work, enabling thousands of families and businesses, including hundreds that are indigenous owned, to improve their lives and prosperity.”
