Global Demand for Canadian Energy Could Unlock Billions in New Investment
This article was originally published in The Hub.
International interest in Canadian energy is showing early signs of life again. After a decade of retreat, the deep-pocketed companies may be coming back.
Shell’s $22 billion acquisition of ARC Resources is a potential early marker. And the recent agreement by SEFE, Germany’s state-owned gas company, to buy one million tonnes per year of LNG from the proposed Ksi Lisims project on British Columbia’s north coast is another.
Other people’s money can be a wonderful thing. Foreign capital and commitments build productive capacity, pipelines, LNG terminals, and create jobs, taxes, and royalties.
But global capital is also restless money with strings attached: investors expect their dollars to be put to work without avoidable impediments, and to deliver benefits and competitive returns for the risks they take.
The first great multinational wave in the 20th century helped build Canada’s conventional oil and gas industry. The second built the modern oilsands.
Beginning in the late 1990s and accelerating through the 2000s, foreign capital poured into northern Alberta’s heavy oil region. American majors had long been there. BP had been here since the 1950s; Total (now TotalEnergies) since 1976. Norwegian entry through Statoil (now Equinor) followed in the early 2000s. Asian state-owned firms—like KOGAS, Mitsubishi, and Petronas entered soon after, some chasing reserves but focusing more recently on LNG opportunities.
By 2014, nearly 30 multinational oil and gas companies were operating in Canada, representing more than $3 trillion USD in combined global revenues.
After peaking between 2014 and 2017, the multinational presence collapsed rapidly, led first by American departures and then European exits. What remains today is majority Asian in composition, reflecting where future LNG demand and heavy oil market growth are expected to come from.
That second wave of foreign capital helped expand oil sands production by more than 1.5 million barrels per day and laid the groundwork for LNG Canada Phase 1. The payoff was large: $174 billion CAD invested from 2005 to 2014 helped push the industry toward $210 billion CAD in 2026 revenue, with royalties and taxes exceeding $40 billion CAD.
Capital fled Canada with remarkable speed when the tide ebbed in 2018. Assets were sold at what now look like bargain-basement valuations. Canadian firms like Canadian Natural Resources, Suncor, and Cenovus opportunistically scooped them up.
Why did the foreigners sell out and leave? Because Canada slowly transformed itself from an investment destination into an investment frustration: pipeline cancellations, regulatory paralysis, legal uncertainties, policy layering across the supply chains, endless delays, and loud public campaigns vilifying the oilsands.
Multinational capital noticed and opted to invest elsewhere, in the many other options available around the world.
Oil and gas companies allocate money based on comparing risk-adjusted returns across the globe. Canada competes against the United States, Australia, Qatar, and other parts of the Middle East for LNG investment. Heavy oil competes with many suppliers, including Iraq and now a U.S.-backed Venezuela. Offshore is back in vogue in Guyana and Brazil. Nowhere is perfect, but money flows to jurisdictions that are most attractive for investment.
That is why Shell’s move to buy ARC is significant. A global player re-upping their presence suggests Canada may again be the subject of conversations at head office boardrooms. But this next wave of global interest, if it comes back, will look very different from the last one.
The previous investment cycle was driven by fears of “peak oil”—the belief that the world was running out of supply. Companies rushed into Canada because the geology offered enormous reserves in a politically stable country with free markets. Today’s investment thesis is about something else entirely: access to energy from secure and reliable suppliers.
But Canada should not mistake recent data points for a guarantee of more new entrants willing to spend money.
Multinational oil and gas companies are not charities. Integrated operators like Shell are global portfolio managers with drilling rigs that demand returns. If Canada doesn’t maintain competitiveness, cash flows generated here can be redirected elsewhere. A multinational can keep its Canadian assets but sweep profits back to the head office and reinvest them in other jurisdictions.
That scenario is capital flight: Canadian resources financing jobs, GDP, and growth somewhere else.
This is why the Canada-Alberta MOU matters. A commitment to building pipelines and growing oil and gas production signals a more constructive alignment between governments and industry—a comfort that helps mitigate investment risk, which in turn improves competitiveness.
Like 20 years ago, Canada has a generational opportunity to start a new cycle to build energy infrastructure, but it will require hundreds of billions of dollars. As before, Canada should attract foreign capital to augment our domestic industry, and finance long-life assets, absorb risk to generate decades of employment, royalties, taxes, and economic activity at home.
The lesson from the last decade’s exodus is not that multinationals are fickle. The lesson is that investment confidence is fragile. Like tides, capital flows in and capital ebbs out. Unlike tides, the return flow is never guaranteed.
