Spending in the oil and gas sector is expected to rise by about $2 billion this year after declines in four of the past five years.
The Canadian Association of Petroleum Producers (CAPP) says it expects about six per cent more will be invested in Canadian upstream energy this year than in 2019, taking the total to about $37 billion, which is about half as much as in 2014 when investment levels reached $81 billion.
It says the “main driver” for the spending jump is an improved economic environment due to provincial government policies, along with growing optimism that new export pipeline capacity will be built.
It lists Alberta’s moves to slash corporate tax rates and ease oil production curtailment levels, as well as Saskatchewan’s regulatory efficiency and recent target to boost oil output by 25 per cent by 2030.
CAPP says non-oilsands oil and natural gas capital investment for 2020 is forecast at $25.4 billion, up four per cent from an estimated $24.4 billion last year.
Oilsands spending is forecast at $11.6 billion in 2020, up eight per cent from an estimated $10.7 billion in 2019 and the first rise in five years.
At an Indigenous housing announcement Thursday, Cenovus CEO Alex Pourbaix said he would be taking a closer look at CAPP’s projections.
“I think last year was a pretty tough year, so eight per cent is not surprising given how tough last year was,” he said.