Capital spending by Canada’s oil and gas industry is set to jump 22% to C$32.8 billion ($26.28 billion) this year as it looks to capitalize on a surge in crude oil prices, the Canadian Association of Petroleum Producers (CAPP) said on Thursday.

A swift recovery in global economy from the COVID-19 pandemic and a supply tightening by the Organization of the Petroleum Exporting Countries (OPEC) and its allies helped drive a 50% surge in oil prices last year, prompting companies to raise their capital budgets in anticipation of strong demand.

The Calgary-based oil and gas lobby expects oil-rich Alberta to lead the country’s provinces, forecasting C$24.5 billion in investments in 2022.

“Rapid demand growth for oil and natural gas globally and strengthening commodity prices mean there is opportunity for Canada’s industry for decades to come,” said Tim McMillan, the group’s president and chief executive officer.

Still, the total forecast is about 40.5% below the industry’s peak spend of C$81 billion reached in 2014, as the country’s energy sector fell out of favour with global investors even before the pandemic.

CAPP’s members represent about 80% of Canada’s oil and natural gas production, according to the industry group.
Source: Reuters (Reporting by Ruhi Soni in Bengaluru; Editing by Anil D’Silva)