Updated June 2025
Figure S1.6 shows historical and forecast values of capital expenditures for Alberta’s oil and gas, oil sands, and emerging resources sectors.
Summary
Total capital expenditures were Cdn$30.9 billion in 2024, representing a 2.2% increase from 2023. Sufficiently elevated oil prices in 2024 alongside improved market access from the Trans Mountain Pipeline Expansion prompted much of the expenditure growth observed across the industry.
From 2025 onwards, enhanced market access due to pipeline expansion and rising crude oil prices over the long term will provide opportunities for crude oil and oil sands investment, while higher natural gas prices will lead to a moderate increase in natural gas investment. Growth is anticipated to be primarily driven by new drilling and continued improvements in operational efficiency.
Oil and Gas Capital Expenditures
In 2024
In 2024, the crude oil and natural gas sector (excluding oil sands) kept capital expenditures consistent from 2023 at Cdn$16.8 billion. New drilling prompted by relatively high oil prices and access to high productivity formations in PSAC areas 2, 4, and 7 provided strong returns on investment.
Number of Wells Placed on Production
Crude oil wells: In 2024, 3385 crude oil wells were placed on production in Alberta, up from 2760 wells in 2023.
Natural gas wells: In 2024, 810 natural gas wells were placed on production, down from 921 wells in 2023.
The well activity forecasts for crude oil and natural gas can be found in Table S4.2 and Table S5.3, respectively.
Base Case Forecast for 2025 to 2034
Base case oil and gas capital spending is forecast to increase to Cdn$18.0 billion in 2025. The gradual growth in oil and gas prices, lower interest rates, and elevated drilling activity are anticipated to be the primary drivers of spending. 2025 expenditures present a 7.4% increase from 2024 levels.
Capital expenditures are expected to increase further to Cdn$18.9 billion in 2026 based on the price forecasts. From 2027 onward, oil and gas capital expenditure growth slows to an average yearly growth rate of 2.4%. By 2034, oil and gas capital expenditures are expected to reach Cdn$22.7 billion.
Oil Sands Capital Expenditures
In 2024
In 2024, the oil sands sector spent an estimated Cdn$13.3 billion on capital expenditures, representing a 6.4% increase from 2023. As the Trans Mountain Pipeline Expansion increases export opportunities, and operators continue to focus on debottlenecking and improving operational efficiency. Moreover, sustaining capital for in situ and mining projects, which is capital spent by oil sands producers to maintain or replace fixed assets, increased by 4.7%, outpacing inflation in 2024.
Base Case Forecast for 2025 to 2034
With planned increases in pipeline capacity, base case oil sands capital expenditures are forecast to reach Cdn$14.6 billion in 2025. Growing at an average rate of 4.1%, oil sands expenditures peak at Cdn$17.5 billion by 2031 as announced projects begin and complete construction, and operational optimization continues. From 2031 to the end of the forecast period, oil sands investment is expected to remain stable, in line with higher levels of sustaining capital required to maintain new operations.
Emerging Resources Expenditures
As momentum builds, the emerging resources sector has experienced increased capital spending in 2024. Under the base case, the estimated capital expenditures in 2024 are Cdn$0.79 billion, a 23.3% increase from 2023. This growth is expected to continue, reaching Cdn$1.0 billion in 2025 and growing to Cdn$1.2 billion by 2034. The capital spending forecast is based on public announcements for hydrogen, helium, lithium, and geothermal projects and their relevant estimated capacity additions. Hydrogen capital expenditures do not include spending on carbon dioxide pipelines.
One-Year Tariff Scenario (Tariff Case)
Tariffs are expected to cause higher costs, lower demand, hindered production, and slower drilling growth, resulting in increased uncertainty within the industry. In this situation, producers are expected to practice more disciplined spending, limiting overall expenditures. This scenario assumes tariffs persist for one year, being removed in early 2026. As such, investment falls in 2025 and begins its rebound in 2026 and 2027 as industry readjusts with the return of demand, lower costs, and higher drilling rates.
As tariffs are introduced in 2025, total capital expenditures (oil, gas, oil sands, and emerging resources) are expected to be Cdn$30.0 billion, an 11.1% reduction compared to the base case. Tariff removal fosters strong investment growth as 2026 and 2027 investment grows by 7.5% each year. By 2028, much of the uncertainty is expected to have eased; however, relatively lower prices slow growth to 3.9% as investment reaches Cdn$36.1 billion, 5.9% below the base case. By 2034, capital expenditures are projected to be Cdn$40.1 billion but remain 3.4% lower than base case estimates. Despite anticipated growth, capital expenditures remain below base case values across the forecast period due to foregone investment in previous years and restrained commodity price growth.
