CAPP Data Centre
CAPP Data Centre
As a data driven organization, CAPP believes it is critical to provide the public with credible, clear and the most up to date information available. CAPP’s Data Centre is a central access hub for information and data related to the many facets related to Canada’s upstream oil and natural gas sector.
Canadian Oil and Gas Industry Overview
Canada in a Global Context
- Canada is the fourth-largest global producer of crude oil and the fifth-largest producer of natural gas. It ranks as one of the least corrupt in the world, with low levels of corruption correlated to high levels of environmental performance. In an increasingly polarized world geopolitically, Canada accounts for one-sixth of the production from countries within the Western Alliance and about 6% of global oil production.
Evolution of the Industry
- Canada has been a trailblazer in the oil and gas industry since the inception of the modern petroleum industry in the 1800s. Over the more than 160 years of operating, Canadian producers have consistently innovated to adapt to new technology and a rapidly changing global environment.
Geology of the Western Canadian Sedimentary Basin
- The country’s large land base is home to many oil and gas deposits and play types thanks to a long, varied geologic history and complex tectonics. The Western Canadian Sedimentary Basin, the largest producing basin in the country, stretches across four provinces and two territories.
- Canada is unique in that, on top of a prolific conventional oil and gas industry, much of the country’s production comes from the oil sands. Both the conventional and oil sands industries have seen Significant innovations over the decades, both now routinely producing oil and gas from deposits that were once considered impossible to unlock hydrocarbons from.
Product Types and Location
- Hydrocarbons include a spectrum of product types, from low-density, gaseous molecules like natural gas to high-density, viscous bitumen. All forms can be found and are produced in Canada.
Canadian Oil and Gas Production
Canada is a significant supplier of oil and gas. Canada is the fourth-largest producer of oil in the world and the fifth-largest producer of natural gas.
Natural Gas Highlights
- Competition from US shale gas starting in 2008 led to a decline in Canadian production. In 2012-13, the trend reversed with the discovery of shale gas in BC and Alberta. Canadian production has now recovered to a record high.
- Shale gas has also shifted the dominant location for natural gas production; from southern Alberta to NE British Columbia and northern Alberta.
Crude Oil Highlights
- Canadian oil production includes oil sands at 3.2 MMB/d (65%), conventional at 1.4 MMB/d (30%), and offshore east coast at 0.2 MMB/d (5%).
- Since 2005, oil sands production has tripled, but after 2018, production growth has moderated. Production has ranged between 3.1 and 3.2 MMB/d the last few years (2021, 2022, and 2023).
- Condensate and pentanes plus production has doubled since 2014 and is currently about 460,000 B/d. The growth of light liquids is a byproduct of the prolific shale gas and oil wells.
The Economic Impact of Canadian Oil and Gas
- The Canadian upstream oil and gas industry has been challenging since the 2014/15 downturn; however, the situation has improved post-COVID with the commodity price recovery and improved pipeline takeaway, which have resulted in record-high revenue levels in 2022 and 2023.
- In 2023, we estimate that the equivalent of 60% of industry revenue, or $111 billion, will be spent on operating expenditures (OPEX) and capital expenditures (CAPEX), with most of this being spent in Canada.
- The improvement in the industry’s health has transferred to the bottom line of provincial governments. The industry paid over $30 billion in oil and gas royalties to provincial governments in 2022. In 2023, over $20 billion is expected.
- Over the past few years, cost inflation has erased most of the industry’s previous gains in reducing operating costs. Managing these costs continues to be an area of focus.
- The economic impact of Canada’s upstream oil and gas sector is significant. In 2022, the sector comprised over 5% of Canada’s GDP. The oil and gas extraction sub-industry is the largest goods-producing industry in Canada and is 2X the size of the next largest sub-industries—residential building construction and engineering & other construction activities.
- When direct, indirect, and induced jobs are considered, the oil and gas sector employs about 800,000 people in Canada. These are well-paying jobs; the average oil and gas worker’s total compensation is 2.3X higher than the Canadian average.
Canadian Oil and Gas Export Infrastructure
Canada is both a significant consumer and supplier of energy. Substantial energy infrastructure has been developed over decades to gather, process, and ship energy to domestic and export markets.
Oil and Natural Gas Liquids Infrastructure Highlights
- There are more than 840,000 km of transmission, gathering, and distribution pipelines in Canada. The pipeline network delivers natural gas, natural gas liquids, and crude oil for domestic use and export.
- Canada has more than doubled its pipeline and rail flows out of the Western Canadian Sedimentary Basin (WCSB) to ~4.5 MMB/d (from ~2 MMB/d) since 2007 to accommodate oil sands growth, however, growth has ultimately been constrained due to limited egress capacity, including the cancellation of three major pipeline projects.
- The Trans Mountain Expansion (TMX) is nearing completion and will add ~590 MB/d of egress capacity, marking a major milestone for Canadian oil producers and providing tidewater access to new markets.
Natural Gas Infrastructure Highlights
- A large network of pipelines moves natural gas from producing regions in Western Canada to Eastern Canada and the United States, where Canada represents the largest foreign supplier.
- Starting in 2016/2017, constraints in regional gathering systems and export lines have limited growth and depressed prices, but recent capacity expansions have helped mitigate these issues. Canadian gas started to be exported from US LNG terminals in 2023. The first Canadian LNG export projects are under construction and will provide greater access to higher-priced international markets.