The 2023 outlook for the Canadian oil and gas industry is “encouraging,” according to industry association group Enserva.
According to Enserva’s State of the Industry report, oil and gas prices for Canadian producers “proved to be very strong” in 2022 and were at their highest point since 2008. Despite that gas prices are expected to be reduced by the end of 2023, “all Private sector forecasts for 2024 predict a return to stronger prices,” the report says.
Inflation and supply chain constraints that have been affecting the industry in recent years appear to have peaked in 2022 and have been receding since then, Enserva said. The Canadian Association of Petroleum Producers has projected an 11 percent global increase in capital spending compared to 2022, driven by strong global demand and prices.
According to the report, Western Canadian drilling activity is expected to increase in 2023, with Alberta expected to see the largest increase due to high capital expenditures expected in the province. British Columbia will increase drilling due to current and future liquefied natural gas (LNG) projects and the province’s agreement with the Blueberry River First Nation. In Saskatchewan, increased activity will occur primarily in the southeastern part of the province.
Enserva expects the total number of wells drilled in the country to increase by 12 percent from 5,500 in 2022 to 6,180 in 2023.
The group also sees positive trends in employment, saying “people involved in energy development will have a huge advantage in terms of jobs and skills, as the underlying technical skills needed to extract, develop, produce, process and exporting oil and gas are transferable to different forms of energy, such as wind, solar, biomass and LNG”.
Meanwhile, Enserva members “are in a strong position to seize opportunities to support the development of Canada’s evolving energy mix,” as upstream companies target investments in carbon-reducing technologies and infrastructure, according to the report
“We are very pleased with the forecast and what it means for the industry and our members,” said Enserva President and CEO Gurpreet Lail. “Global demand for oil and gas continues to increase, and Canadian industry will continue to be a significant and growing contributor to meeting long-term energy needs, particularly in Western Canada. At the same time, the energy services sector is strongly positioned to play an important role in the evolving energy mix as more of our members invest in clean carbon technology solutions to meet growing demand.”
“While there will continue to be a significant role for oil and gas in the long term, demand for renewable energy and mineral requirements will provide an attractive growth market for Enserva members to add to their portfolios,” he said Lail. “The key will be to ensure that the energy services sector can take advantage of these opportunities by enabling government policies that create the right conditions for investment.”
In an earlier report, Canada’s Energy Regulator predicted the country’s oil production would rise over the next decade and then begin to decline as countries strive to curb greenhouse gas emissions. Wildfires in Alberta have also been affecting oil and gas production in recent months.
Enserva, formerly known as the Petroleum Services Association of Canada, is headquartered in Calgary, Alberta. The group changed its name in September 2022. Its members include representatives from the energy services, supply and manufacturing sectors.
To contact the author, send an email to rteodoro.editor@outlook.com
