Canada’s Oil & Gas Sector Expected to Break 2022’s Output Record

The Canadian oil sector is expected to produce more oil than it did in 2022, but not significantly more. Oil and gas companies in Canada are likely to spend more in 2023, but analysts say it won’t be a return to boom times, just another year of steady growth.

In 2022, the Canadian energy industry saw its most successful year in a decade due to a dramatic increase in commodity prices. Energy prices reached historic highs in 2022, and Canadian corporations made record profits as a result of the elimination of pandemic restrictions, the conflict in Ukraine, and the long term effect of years of under-investment in oil and gas.

However, the majority of these funds were directed to debt reduction and shareholder dividends rather than to large-scale building or infrastructure improvement initiatives. This growth is projected to continue in 2023 as well, even as commodity prices are also expected to increase.

“The oil producers have become far more financially disciplined over the last six or eight years,” said chief investment strategist at IG Wealth Management, Philip Petursson. “What we know is that in an economic downturn, oil demand falls,” Petursson said. “So I think (companies) are going to want to be a little more measured and not say `hey, oil prices are just going to trend higher — let’s go all in in 2023.’ ”

According to ATB Financial, in the first ten months of 2022, Alberta’s crude production averaged 3.7 million barrels per day, an all-time record driven by rising global demand.

Based on the recently published capital budgets and production estimates of oil and gas corporations, analysts predict even greater output in 2023. Assuming that oil prices remain at around US$75 per barrel in 2023, many businesses will be able to pay off significant amounts of debt and have more cash available.

Original source material for this article taken from here