Oil Sands Investment Set for First Gain Since 2014 Crash
IT HAS NOTHING TO DO WITH KENNEY, HIS TAX CUTS OR UCP AND ITS SERVICE CUTS AUSTERITY FOR ALBERTANS TAX GIVEAWAY TO BIG OIL Kevin Orland Bloomberg January 30, 2020



(Bloomberg) -- Investment in Canada’s oil-sands is forecast to grow for the first time since prices crashed in 2014.

Capital spending in the the world’s third-largest crude reserves is projected to rise 8.4% to C$11.6 billion ($8.8 billion) this year, according to the Canadian Association of Petroleum Producers, the industry’s main lobbying group.

The forecast signals a tentative return of optimism to the oil sands, where pipeline bottlenecks and environmental opposition made expansion difficult even after oil prices rebounded in recent years. CAPP attributes the expected gain to tax cuts implemented by Alberta’s new government, an easing of the province’s output limits and efforts in neighboring Saskatchewan to boost output.

“It has been a tough five years, and Canada has not fared well at a time when global demand continues to rise,” CAPP Chief Executive Officer Tim McMillan said in an interview. “It has taken some hard work, especially at the provincial level, to change the global view and put Canada back in a position where it can start to attract appropriate levels of capital again.”

Expenditures for Canada’s oil and natural gas sector as a whole may increase 5.4% to C$37 billion. Outside the oil sands, spending is projected to rise 4.1% to C$25.4 billion.

The additional C$2 billion in capital spending this year will create or sustain about 11,800 direct and indirect jobs across Canada, the organization projected. About 8,100 of those jobs will be in Alberta, which has struggled with elevated unemployment since the 2014 price crash.

Even with this year’s increase, the industry is still a long way from its headiest days. The projected oil-sands spending for 2020 is about one-third of the peak of C$33.9 billion in 2014, according to CAPP figures.

“In business terms, the spending increase is important enough to recognize,” McMillan said. “But just as important, it’s the changing of the trajectory from consistently losing capital investment to turning that around.”

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