Canada’s oil and gas operators are facing a laundry list of competing priorities from major stakeholders as the industry recovers from a difficult decade.

“Governments at different levels have conflicting objectives and need to talk constructively with each other,” said Shane Doig, KPMG in Canada’s National Energy Leader. “Investors have objectives surrounding capital returns that make balancing short term production growth and longer-term reserve growth difficult. Layered in is a heightened focus on energy security, ESG concerns like reduced carbon and methane emissions, and the importance of Indigenous reconciliation.”

Meanwhile longstanding bottlenecks limiting export growth are finally easing, creating opportunities for growth. With oil, recent U.S. pipeline connections have Canadian operators delivering more product to Gulf Coast refineries or export markets, shifting the price point downstream from traditional Midwest markets. With TMX coming on stream, access will improve further.

Canadian natural gas operators are also enjoying improved access through greater connectivity to U.S. regional markets and in limited cases access to LNG export terminals. Still to come is the LNG Canada export facility in 2025.

Strategically, managing competing stakeholder priorities while building a resilient company positioned to take advantage of opportunities will be a significant challenge.

“It’s going to be hard,” he said. “Healthy risk management conversations are required. It is now so much more about risk trade off versus risk mitigation. We are often trained to mitigate risk but now we must accept there are conflicting risks and understand where we are trading one risk for another.”

Read more in the 2023 Top Operator's Report here.