85 years of Canadian Oil & Gas Capex Cycles
The Gist: This post introduces capital spending data for the Canadian O&G majors since 1939. No takes, just a chart-packed history I hope you enjoy.
I must admit that before embarking on this data-collecting process, I knew relatively little about the history of the companies that were instrumental to the Canadian energy industry.
So I started the only way I knew how - digging through old annual reports.
And with that, let’s begin.
Colonel Drake is often credited with being the first to discover oil in N. America but a year prior, James Miller Williams dug a commercial well by hand near Oil Spring, Ontario.
Canada continued to be a net oil importer because its manufacturing and population hubs were predominantly located in the eastern provinces of Quebec and Ontario, while the hydrocarbon-rich areas were situated to the west in the province of Alberta, wedged in between the mountainous American Cordillera and the Canadian Shield.
Following World War II, the industry implemented some emerging technologies, leading to exponential growth in oil production.
Initially, the growth stemmed from conventional production techniques. It wasn't until later in the industry's evolution that it began depending on more capital-intensive methods, which are now commonplace in the oil sands regions, including in-situ/SAGD, mining, upgrading, SCO, and others.
The year 1947 held great significance as Imperial Oil made a crucial oil discovery at the Leduc well #1. The discovery would ignite the first Canadian oil boom.
It was soon followed by Socony-Vacuum’s (later Mobil Oil) discovery of the Pembina oil field in 1953.
Pembina was one of the first times the industry used a new technology called fracking (HERE).
A few years prior, Halliburton would license this new technology from Stanolind Oil & Gas before commercializing it throughout the post-WW2 oil boom.
One could argue that where the Canadian industry goes, the U.S. will eventually follow. You’ll see what I mean by that later in this post.
Before these discoveries, efforts to commercialize the oil sands, such as the Bitumount industrial plant (HERE) were put forward but these aforementioned conventional discoveries that were easier to refine as well as closer to market put the development of the oil sands on the back burner.
By the mid-1960s the oil sands found a champion for its development in the form of Harold Pew of Sun Oil Company (now Suncor). Sun Oil, whose roots date back to the early Pennsylvania oil days, would provide the financial backing for the first commercial oil sands project, the Great Canadian Oil Sands (GCOS) facility (HERE).
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