By Charles Lefebvre

reason for optimism

CAPP predicting increased investment in oil and gas in 2020

Jan 31, 2020 | 11:17 AM

MEDICINE HAT, AB — The organization representing oil and natural gas companies across Canada say they’re expecting an increase in investment in Alberta oil this year.

The Canadian Association of Petroleum Producers (CAPP) released its 2020 forecast on Thursday, and say they’re expecting to see $37 billion worth of investment in the oil and gas sector in 2020, up from $35.1 billion last year.

Investment in conventional oil and natural gas is currently forecast at $25.4 billion, a $1 billion increase from the year before, while investment in the oil sands is forecast at $11.6 billion, up from $10.7 billion last year.

“It’s been a lot of hard work to re-position our industry for success, and to get the global interest to help drive this investment,” said Tim McMillan, president and CEO of CAPP, over the phone from Prince George

CAPP is citing Alberta’s Job Creation Tax Cut as one of the reasons for the increased forecast.

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“For long-term investors like the oil and gas sector, this is a very strong signal that if they’re investing in the long-term, the government is also looking at that time frame,” said McMillan.

The Alberta government is also welcoming the forecast.

“I am extremely pleased to see capital investment beginning to return to our province,” Energy Minister Sonya Savage said in a statement. “Government is taking concrete steps to show that Alberta is open for business and results like this prove our plan is working.”

McMillan also cited the Province of Saskatchewan’s growth plan to increase oil production in that province, as well as optimism over pipeline construction, as reasons for the higher investment forecast.

CAPP says the $2 billion investment “creates or sustains about 11,800 direct and indirect jobs across Canada,” according to a release. Of those jobs, an estimated 8,100 would be in Alberta, with the rest spread across Canada.

“For every drilling rig, that means increased jobs in the hotel industry, in restaurants, in supply chains,” McMillan said. “The energy sector certainly in Alberta really stretches from border to border, and the increase in investment means benefit for pretty much every community in the province.”

McMillan adds CAPP will continue advocating the federal government to ensure pipeline projects, such as the Trans Mountain expansion, are completed.