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Oil and gas investment expected to leap 22%: CAPP forecast

Don Horne   

News CAPP gas investment oil

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

Capital spending in the sector is expected to grow by $6 billion 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. 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 to support Canadians as we work our way through the ongoing Covid-19 pandemic,” says Tim McMillan, CAPP president and CEO.


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

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 per cent 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 per cent of total market share, a four percentage point drop which represents over $21 billion in potential investment.

“Demand for oil and natural gas is expected to rise and remain strong for decades. 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,” says McMillan. 



Alberta is expected to lead all provinces with upstream investment expected to increase 24 per cent to total $24.5 billion in 2022. Over 80 per cent 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 per cent 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 per cent to approximately $195 billion in 2022. For comparison, the Gulf of Mexico is expected to grow investment by 21 per cent 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. 


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