Canada’s Oil and Gas Firms To Boost Upstream Capex To $30 Billion in 2024

Canada’s oil and natural gas sector is set to boost upstream capital expenditures to around US$30 billion (C$40.6 billion) in 2024, up slightly from an estimated actual investment of US$28.8 billion (C$39 billion) for 2023, the Canadian Association of Petroleum Producers (CAPP) said in an estimate on Tuesday.

“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,” CAPP president and CEO Lisa Baiton said.

“We are also moving closer to seeing the completion of Canada’s first globally significant liquefied natural gas export facility in British Columbia, expected in 2025.”

Despite the cautious optimism about oil and gas production this year, 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,” Baiton noted. 

Oil producers in Alberta plan higher output for this year and expect to earn more from their heavy crude once the long-delayed expanded Trans Mountain Pipeline enters into service.

Despite the uncertainty around the start date of the Trans Mountain Pipeline Expansion (TMX), some of the biggest Canadian producers plan to boost production in Alberta’s oil sands in the short to medium term.

The top liquids producer, Canadian Natural Resources, for example, announced at the end of 2023 its 2024 capital budget that targets exit 2024 production levels of around 1.455 million barrels of oil equivalent per day (boepd), up by around 40,000 boepd from the targeted exit 2023 production levels. The company also targets 2025 average annual production growth of approximately 4% to 5% compared to the 2024 average annual production levels.  

Cenovus Energy plans to invest capital this year primarily for progressing the West White Rose project “as well as incrementally growing production at the Foster Creek, Christina Lake and Sunrise oil sands facilities.” 

Analysts expect tie-backs to existing oil sands facilities or expansion of operational sites by some of the biggest Canadian oil firms to boost Canada’s crude oil production by 8% by 2025.   

By Tom Kool for Oilprice.com

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