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Canadian oil & gas investment expected to rise 22% this year to $32.8B, but challenges remain

Click to play video: 'Oil and gas investment rebounds in Canada but challenges remain'
Oil and gas investment rebounds in Canada but challenges remain
WATCH: A new forecast predicts a significant rebound in oil and gas investment across Canada and Alberta. But as Tomasia DaSilva reports, challenges remain for the industry – Jan 20, 2022

Canada’s oil patch is getting a bit of its swagger back following years of pullback — but industry groups warn challenges remain.

The Canadian Association of Petroleum Producers (CAPP) 2022 forecast predicts a 22 per cent increase in natural gas and oil investment in 2022.

The association also said capital spending in the sector is expected to reach $32.8 billion, compared with an estimated $26.9 billion in 2021.

Alberta is expected to lead all provinces with more than 80 per cent of the new spending.

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CAPP says the expected growth in overall spending this year would mark the second straight year of significant increases in investment.

Upstream investment expected to increase 24 per cent to total $24.5 billion in 2022 — an additional $4.8 billion of investment compared to 2021.

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CAPP said the growth is being driven both in the conventional and oilsands sectors.

“The good news is that the Canadian economy needs a boost, that we are struggling coming out of the pandemic as an economy and these are meaningful increases from Canada’s largest investor,” CAPP president and CEO Tim McMillan told Global News.

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The bad news he added, is that “more work still needs to be done.”

McMillan said within the context of total global investment, Canada is continuing to lose market share to other jurisdictions.

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“We have seen a shift of investment globally from Canada,” he said. “From the 10 per cent we used to attract — now we’re down to just six per cent.”

“If today we were still attracting 10 per cent of the global investment in oil and gas, that would be an additional $21 billion into the Canadian economy.”

Why Canada is falling behind

McMillan said unfortunately Canada has seen some major global investors take their capital and go to other places in the world: Russia, the Middle East and North Africa.

And while demand around the world is growing for oil and gas — he added Canada is not doing its part to meet the global challenges.

“The big problem is we don’t have the infrastructure to get our products there. We have a regulatory system that is very difficult to get through.”

“A few years ago we had 16 LNG facilities that were trying to work through the regulatory system — so far only one has made it.”

He expects the demand for energy to grow for decades to come, but said it will take a “national effort” for Canada to actually capitalize on that demand.

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More challenges ahead

Another looming challenge facing the industry is the skilled labour shortage in Canada.

Alberta-based recruitment and employment agency About Staffing told Global News it has definitely seen an uptick in demand for “quality talent” within the energy labour force — both for field work and office staff.

“We’re seeing a little bit of both,” senior recruiter Cristina Schultz said.

“Especially in Calgary, we’re seeing a lot of those back end financial positions, accounting positions.

“And then within the actual labour force and needing those talented trades — we’re certainly starting to see that uptick there.”

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Alberta posts strong job gains, but employers struggling to find ‘qualified’ people

Shultz said it’s a misperception that there aren’t jobs out there for oil and gas workers.

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“You have to know the right places to look, at the end of the day,” she added. “And you really have to put yourself out there because there is without a doubt opportunities available.”

Those opportunities may even come with more pay and benefit.

“To some degree yes,” Schultz said. “We are starting to see an uptick within the salary — again trying to attract the right people.

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— With files from The Canadian Press

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