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 “have proven very strong” in 2022, and were at their highest point since 2008. While gas prices are expected to be subdued as 2023 ends, “all 2024 private sector forecasts predict a return to stronger prices”, the report said.
The inflation and supply chain constraints that have been impacting the industry in the past few years appear to have peaked in 2022 and have been receding since, Enserva said. The Canadian Association of Petroleum Producers has projected an 11 percent overall increase in capital spending compared to 2022, spurred on by robust global demand and prices.
According to the report, Western Canadian drilling activity is expected to increase in 2023, with Alberta expected to have the greatest increase due to the high capital expenditures expected in the province. British Columbia will see increased drilling due to current and prospective liquified natural gas (LNG) projects and the province’s agreement with the Blueberry River First Nation. In Saskatchewan, the increase in activity will be mostly in the southeast part of the province.
Enserva projects 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 be at a huge advantage in terms of jobs and skills as the underlying technical skills required to extract, develop, produce, process and export 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 take advantage of opportunities to support the development of the evolving energy mix in Canada”, as upstream companies target investments in carbon reduction technologies and infrastructure, according to the report.
“We’re extremely pleased with the forecast and what this means for the industry and our members”, Enserva President and CEO Gurpreet Lail said. “Global oil and gas demand continues to increase, and the Canadian industry will continue to be a meaningful and growing contributor to meet long-term energy needs, particularly in Western Canada. At the same time, the energy services sector is strongly positioned to take 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 meaningful role for oil and gas in the long-term, renewable energy demand, and mineral requirements are going to provide an attractive growth market for Enserva members to add to their portfolios”, Lail said. “The key will be to ensure the energy service sector can take advantage of these opportunities through enabling government policies that create the right conditions to invest.”
In an earlier report, the Canada Energy Regulator predicted the country’s oil production to rise for the next decade and then start declining as countries strive to curb greenhouse gas emissions. Wildfires in Alberta have also been impacting oil and gas production for the past months.
Enserva, formerly known as Petroleum Services Association of Canada, is headquartered in Calgary, Alberta. The group changed its name in September 2022. Its members include representatives of the energy services, supply, and manufacturing sectors.
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