Enserva's oil and gas forecast shows lower investment, rising LNG demand for 2025-26

Canada’s oil and gas sector is outlining the 2025-2026 year with cautious optimism as shifting global markets and an uncertain geopolitical climate have renewed debate over the need for new export infrastructure and private sector investment in Canada.According to Enserva’s newly released State of the Industry Report, the year has been shaped by record global oil demand, surging LNG consumption and intensifying geopolitical pressures that continue to influence commodity prices and competitiveness.While the report says emerging economies are expected to push oil consumption to new highs, recent OPEC production increases have weighed on prices, and US trade policies remain a constant challenge for Canadian exporters.“Canada’s energy industry is navigating a period of adjustment, but the long-term fundamentals — especially for natural gas — remain encouraging,” Enserva President and CEO Gurpreet Lail said.“With LNG Canada ramping up, Canadian producers are positioned to benefit from sustained global pricing once near-term pressures ease moving into the new year.”.Enserva sees bright outlook for Western Canadian oil and gas service and supply sector.Some of the key findings of the report were that upstream investment is projected to decline by 5.6% in 2025 and a further 2.2% in 2026 as lower oil prices dampen oil sands spending and slow conventional drilling in Alberta and Saskatchewan.Weak natural gas prices late in 2025 are also prompting shut-ins and reduced production, though activity is expected to pick up after mid-2026 as new LNG-linked market access becomes available.The total number of wells drilled in 2025 is forecasted to fall roughly 9%, with British Columbia facing the steepest decline — 16% — before a projected rebound in 2026.Alberta and Saskatchewan are also projected to see 7% and 10% declines, respectively.After strengthening through mid-2025, service-sector employment is also expected to fall later in the year — and remain flat through 2026 as major operators continue workforce reductions and restructuring.Enserva is also warning that several headwinds could disrupt the outlook, including trade tensions between Canada and the US, the upcoming 2026 review of the Canada-US-Mexico Agreement (CUSMA), and federal regulatory uncertainty.“Next year’s outlook shows both challenges and clear opportunities,” Lail stated.“Market access, policy stability and infrastructure development will shape how effectively Canada can compete — and win — in global energy markets.”Randy Ollenberger, managing director at BMO Capital Markets, told the press on Wednesday that stability in activity levels is one of the most encouraging takeaways from the report.“There’s a level of optimism underlying what we saw in the report,” Ollenberger said.“Stable levels of activity are positive — we don’t want to see declining levels, and the key thing we talked about today is the opportunities we could capitalize on if we see incremental investment in egress.”Asked about whether new pipelines are necessary, Ollenberger said existing de-bottlenecking plans could accommodate projected growth but stressed that Canada’s potential remains much greater..Alberta oil patch bosses crash Trump’s inauguration party; Smith changes plans.“We need to be able to get our product to market through either pipelines or LNG if we're going to ship it across the ocean,” Ollenberger said.“The key thing to remember here is that we could be producing so much more... We could actually be producing 3.8 million barrels a day more... So there's an opportunity here.”John Gorman, Halliburton’s vice-president for Canada and the US west coast, said Alberta has been proactive in helping service companies introduce new technologies — such as electric fracturing fleets that have been widely adopted in the U.S.“The [Alberta government] has been extremely helpful in trying to promote some of our new technologies,” Gorman said, stating that Halliburton has been working with Alberta over the past six months to streamline equipment approvals.“Over 50% of our fleet in the US is electric, and we've been trying to bring it into Canada.”Despite low prices, Gorman believes Canada remains a highly competitive player in the market.“We have some of the most competitive formations in the world,” he said.“Clearwater and McMurray are two of the best heavy oil resources globally, and the Montney and Duvernay are among the best gas formations. We’re extremely competitive when we can get our product to market.“Our executives and board believe in Canada. They believe in the resource base, in our customers, and in the leadership here.”

Enserva's oil and gas forecast shows lower investment, rising LNG demand for 2025-26

Related Stories