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The Canadian oil and gas industry had already faced years of headwinds leading into 2020. This included stalled or cancelled infrastructure projects resulting in Western Canadian producers receiving discounted pricing as U.S. shale production soared; carbon taxes and new regulations designed to accelerate the transition to green energy, which increased regulatory uncertainty and operating costs; and declining investment and capital spend in the sector, with accompanying job losses, since 2014. Then came the challenges of 2020. Early in the year, Saudi Arabia and Russia commenced a price war that resulted in plummeting commodity prices just as the world’s response to the COVID-19 pandemic instantly eliminated almost 30 million barrels per day of global oil demand. This created an over-supplied market that ultimately saw commodity prices sink to unprecedented negative numbers in the spring. In the wake of unprecedented challenges, green shoots of M&A activity are beginning to appear as the industry repositions itself for recovery. Commodity prices improved over the summer and fall as energy demand recalibrated with the gradual reopening of the world economy. Oil demand ultimately closed the year only 10% lower than pre-COVID-19 levels. While the outlook improved with the announcement of multiple successful COVID-19 vaccines […]
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