... Investment in Canada’s Natural Gas, Oil Sector to Reach $32.8 Billion

CAPP Projects Investment in Canada’s Natural Gas, Oil Sector to Reach $32.8 Billion in 2022

The Canadian Association of Petroleum Producers (CAPP) is forecasting a 22 percent increase in natural gas and oil investment in 2022. Capital spending in the sector is expected to grow by $6 billion (CAD) to reach $32.8 billion, compared to an estimated total investment of $26.9 billion in 2021.

The expected growth in spending for 2022 would mark the second straight year of significant increases in investment as Canadian producers look to capitalize on stronger commodity prices due to rapidly growing global demand for natural gas and oil.

“Canada’s natural gas and oil industry is continuing its path towards recovery,” said CAPP president and CEO Tim McMillan in a Jan. 20 statement. “The growth in upstream investment will support jobs across the country and provide a positive boost to Canada’s economic recovery. Improving commodity prices and increased investment in natural gas and oil production will also deliver billions more dollars of much-needed government revenues to support Canadians as we work our way through the ongoing Covid-19 pandemic.”

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Conventional oil and natural gas capital investment for 2022 is forecasted at $21.2 billion, up from an estimated $18.1 billion last year, while growth in oil sands investment is expected to increase 33 percent to $11.6 billion compared to $8.7 billion last year.

“Rapid demand growth for oil and natural gas globally and strengthening commodity prices mean there is opportunity for Canada’s industry for decades to come,” McMillan said. “To ensure a true recovery takes hold in Canada, government at all levels along with the industry must work together to create an environment where the natural gas and oil industry can thrive and attract investment back to Canada.”

While this is great news for the struggling Canadian economy, within the context of total global investment Canada is continuing to lose market share to other jurisdictions. In 2014, Canada was viewed as a top tier international investment jurisdiction for resource development and attracted $81 billion or more than 10 percent of total global upstream natural gas and oil investment. International energy research firm Wood Mackenzie is forecasting global spending on upstream natural gas and oil production will reach $525 billion in 2022. Based on that forecast Canada has fallen to just six percent of total market share, a four-percentage-point drop that represents over $21 billion in potential investment.

“Demand for oil and natural gas is expected to rise and remain strong for decades,” McMillan said. “Every barrel of oil and molecule of natural gas not produced in Canada will be produced by other countries that likely do not match our high environmental and social standards. As one of the most innovative and responsible energy producers in the world, Canada needs to take on a larger role in meeting the growing global demand for energy.”



Alberta is expected to lead all provinces with upstream investment expected to increase 24 percent to total $24.5 billion in 2022. Over 80 percent of the new spending this year is focused in Alberta, representing an additional $4.8 billion of investment into the province compared to 2021. The growth in investment is being driven both in the conventional and oil sands sectors.

British Columbia

With rapidly growing global demand for natural gas translating into multi-year highs in natural gas prices, producers in British Columbia are showing interest in growing their investment in the province. However, the ongoing review on royalties paired with the current moratorium on issuing development permits stalled investment in 2021. Investment in the province fell approximately $600 million short of last year’s anticipated $3.9 billion, only reaching $3.4 billion in 2021. In 2022, upstream investment in B.C. is forecast to grow to $4.1 billion. Rig counts in B.C. currently sit at half of the historical average for mid-January indicating producers are potentially holding off some investment until later in 2022.


In 2022, producers expect to invest $2.7 billion in the province, a 16 percent increase over 2021. Similar to British Columbia, Saskatchewan’s 2021 upstream investment was forecast to reach $2.8 billion but updated estimates show producers spent $2.3 billion last year, a shortfall of approximately $500 million. Increasing municipal costs in some rural jurisdictions have significantly raised concerns which are likely contributing to a slowing of investment in the province.


In Newfoundland and Labrador, offshore investment is expected to remain relatively flat at $1.6 billion in 2022 compared to $1.5 billion last year. Globally, the offshore sector is attracting significant new investment with expected spending in the sector to grow by seven percent to approximately $195 billion in 2022. For comparison, the Gulf of Mexico is expected to grow investment by 21 percent to $13.1 billion this year.

Canada’s offshore development offers some of the world’s lowest emission oil. The natural gas and oil industry along with the provincial government are seeking to work with the federal government to improve the region’s global competitiveness to help realize the value in Canada’s offshore sector.

Credible projections from the International Energy Agency (IEA), OPEC and IHS Markit indicate oil demand will top 100 million barrels per day (bpd) within the next two to three years and remain at or above that level until 2040 and beyond.

Natural gas is expected to be one of the fastest growing sources of energy in the world, with demand projected to increase 14 percent by 2030, and 28 percent by 2050, according to the IEA World Energy Outlook 2021.

The natural gas and oil industry is one of the largest employers of Indigenous people in Canada with a supply chain that includes approximately 275 Indigenous-owned businesses from which producing companies procure about $2.5 billion annually in products and services.

CAPP represents companies, large and small, that explore for, develop and produce natural gas and oil throughout Canada. CAPP’s member companies produce about 80 percent of Canada’s natural gas and oil. CAPP’s associate members provide a wide range of services that support the upstream oil and natural gas industry. Together CAPP’s members and associate members are an important part of a national industry with revenues from oil and natural gas production of about $116 billion a year. CAPP’s mission, on behalf of the Canadian upstream oil and natural gas industry, is to advocate for and enable economic competitiveness and safe, environmentally and socially responsible performance.

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