Canadian oil and gas companies forecast to increase spending 10%-plus in 2024

Canadian oil and gas producers, services firms and financiers are forecasting “moderate growth” in 2024 as new overseas export outlets emerge on British Columbia’s (BC) Pacific coast, ATB Capital Markets Inc. reports.

The optimism emerged in a Sept. 18-Oct. 2 survey of 26 producers, 30 oilfield service operations and 29 institutional investors, said ATB, the Alberta branch of the government-owned bank.

ATB predicted that its industry survey results show corporate budgets increasing by 10% or more and adding production to catch up with new export services.

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The survey results showed that 88% of manufacturing executives and 60% of service firms expect an improvement in oil and gas field operations, while nearly half of firms expect an increase in headcount.

The survey attributes the bright mood to the completion of $21 billion in early 2024 Trans Mountain Pipeline oil expansion (TMX) in early 2024, followed in the natural gas sector by LNG Canada and its Coastal GasLink (CGL) supply line.

Both projects are considered likely to support natural gas prices. TMX is adding 590,000 b/d of oil sands export capacity, Canada’s largest user of natural gas for thermal processes. First phase alone LNG Canada would transport 14 million metric tons/year (1.8 Bcf/d).

Canada’s energy regulator expects to issue a decision soon on preliminary, temporary TMX start-up fees. A year of detailed cost reviews of the expansion was planned due to carrier issues with high construction costs and freight charges.

LNG Canada in Kitimat and CGL in northern BC are in the final stages of construction, with deliveries expected by 2025. The project has expressed confidence in plans to double export capacity. CGL uses a pipeline capable of carrying 5 Bcf/d.

Meanwhile, the Supreme Court of Canada further encouraged the industry with a verdict on October 13 that the federal government violated the national constitution with its controversial Impact Assessment Act (IAA) of 2019, which claims sole approval authority for the project.

Prior to the ruling, an ATB survey found that “more than two-thirds of survey respondents identified federal energy and environmental policies and regulations as a primary concern.”

The Alberta government, which led the victory over the IAA, pledged to get federal authorities to follow Supreme Court instructions to work with provincial governments, which own resources and manage development under the Constitution.

Even before the brief breakout, the industry survey results were “a testament to the sector’s resilience and adaptability, setting it up for sustained growth as it continues to adapt,” said ATB research manager Tim Monachello.

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