Figure 3 displays the capital investments in Canada over the period 2010-2025, split by supply segment. Investments peaked in 2013 at around US$49 billion, falling to US$26 billion in 2015 and to a low of US$18 billion in 2016 in response to lower oil prices. Nevertheless, several major projects – including Surmont Oil phase 2, Imperial Oil’s Kearl expansion phase, and the Husky-operated Sunrise phase 1 – were completed and came online in 2015. Considering recent capital guidance revisions and the wider collapse in drilling and completion activity in Western Canada, Rystad Energy now expects 2020 Canadian oilfield spending to fall below US$9 billion. This represents a 46% year-on-year decline, with reductions in shale and oil sands accounting for more than 70% of the decrease. We do not expect investments to grow significantly in the medium term, but they should reach around US$17 billion by 2025, similar to the level seen in 2019 before Covid-19 sparked a new oil price crisis. While such a tally would be nearly double the current forecast for 2020, it would also still be less than half of the spending levels seen across several years at the beginning of the decade.
Having increased to 4.45 million bpd in 2019, oil production in Canada is expected to exhibit a 5% year-on-year decline this year as operators respond to lower oil prices through production curtailments and a slow-down in activity. In the medium term, however, the country is expected to increase oil supply again, reaching 4.7 million bpd by 2025 thanks primarily to the development of new oil sands projects, as well as increased activity in the Duvernay and Montney shale plays.