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Alberta’s oil centre

Canada covers the north of North America bordered by the Atlantic (east), the Pacific (west) and the Arctic Ocean (north). It has a marine border with Greenland and a land border with the USA.

People migrated from Siberia to Canada 15,000 years ago followed by Norsemen settling in Newfoundland in 1000 AD. The first modern Europeans then arrived in 1497 and 1534, claiming areas for England and France.

In 1583 the first British colony was established in Newfoundland and traders began to move inland. As aboriginal numbers declined mostly due to disease, battles were fought between the French in Quebec and the British. In 1763 most areas were ceded to the UK but after US independence territories south of the Great Lakes became part of the USA. Peace was finally achieved in 1815.

Immigration increased and a single Canadian government began to develop leading to an autonomous federal Dominion in 1873 with 10 provinces and 3 territories.

In 1931 Canada achieved independence from the UK and the 1982 Canada Act created full sovereignty. Newfoundland had become a crown colony of the UK in 1934 but voted to join Canada in 1949.

Canada now has a strong economy dominated by the service industry, but with forestry and oil as important sectors.

Canada is the second-largest country in the world, after Russia, with the longest coastline and the northernmost settlement.

There are 8 forest regions, including extensive forest on the Canadian Shield and over 2 mm lakes. Much of the Canadian Arctic is covered by ice and permafrost. The country is geologically active with earthquakes and volcanoes.

Most oil and gas is produced in Alberta, which reached a maximum for conventional oil in 1998. However, the Athabasca oil sands in northeast Alberta (and small parts of Saskatchewan) now represent a huge industry based in Fort McMurray. Bitumen trapped in shallow sands is drilled and produced using steam assisted gravity drainage (SAGD) or directly mined and refined to make synthetic oil.

Canada's oil production is thus forecast by Globalshift to grow significantly as new such projects are developed and there is also considerable potential for shale oil production from formations comparable to those exploited in the USA.

Conventional gas production from Alberta is also near peak but shale gas and coal bed methane, pioneered in neighbouring US states, have been barely exploited.

Canada’s offshore production originates from Newfoundland (oil) and Nova Scotia (mostly gas). Fields developed in this harsh climate produce a small but increasing share of output. Large volumes of oil and gas also probably lie in Arctic Canada, onshore and offshore, but only small volumes have so far been developed due to the cost and environmental implications.


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North America

Canada Oil and Gas Summary



Land area (sq kms)

Oil prod (000s b/d)

Gas prod (bcm/yr)

Oil cons (000s b/d)

Gas cons (bcm/yr)

Statistics (in 2020)


34 mm






Brief history of the country

Canada has a parliamentary system within a constitutional monarchy. The UK monarch is head of state represented by the Governor General of Canada.

However, executive powers are directed by the Cabinet responsible to the elected House of Commons and chosen and headed by the Prime Minister who is head of government.

The Senate has 105 members, and the House of Commons has 338 members.

Canada has a federal structure and the provinces have jurisdiction over oil and gas development.

The federal government shares responsibility with the National Energy Board (NEB) regulating pipelines, energy development and trade.

Another organisation, Natural Resources Canada, encourages the development and use of natural resources.

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CANADA: SEDIMENTARY BASINS (source: Crain’s Petrophysical Handbook)

The first surface oil in Canada was recorded in 1778 in the Athabasca oil sands in Alberta. Commercial oil wells were drilled near seeps in Ontario in 1858 (a year before the Drake well in the USA). The country also produced oil from shale deposits (Albertite) in New Brunswick in the mid-1800's. Abraham Gesner distilled liquid fuel from Albertite, inventing kerosene in 1846 and using it to replace whale oil for lighting.

Oil production was achieved in New Brunswick at Stoney Creek in 1884 and wells are still producing from this area. Meanwhile the first gas well in Alberta had been drilled in 1883 at Alderson (Langevin Siding) by the Canadian Pacific Railway (during a search for water). By the early 1890s further wells had been drilled in this area.

As conventional oil use grew Canada built the world’s first petroleum complex at Petrolia in Ontario which, up to 1897, supplied nearly all of the country’s oil products, including lubricants, kerosene, gasoline and chemicals for food, medicine, and industry. Exports also went to the USA and Europe.

By 1908 pipelines were transporting gas from the Bow Island gas field to Calgary and the Alberta oil boom began in 1914 when the Dingman-1 well was drilled near Turner Valley. Between 1920 and 1947 there were many shallow oil discoveries made in Alberta. Also in 1920 the Norman Wells field was discovered in the North West Territories along the Mackenzie River.

The most significant early discovery in Canada was made in 1947 by Imperial Oil which drilled the Leduc-1 Devonian oil discovery in Alberta. In 1951 commercial oil discoveries in Manitoba and British Columbia were made, followed by Saskatchewan in 1953. Output began to grow steadily primarily from the Albertan part of the West Canadian Sedimentary Basin.

Dr Karl Clark pioneered the extraction of oil from tar sands by the hot water process in 1921 and pilot plants were built in 1930 and 1949 run by the Alberta Research Council. Great Canadian Oil Sands Ltd (which became Suncor) then began production of this unconventional oil in the Athabasca tar sands north of Fort McMurray in 1967. Output steadily grew reaching over 2 mm bbls per day. Small volumes of light oil from tight reservoirs including shales, have also been produced from Alberta for many years with output increasing substantially since 2010.

In 1966 Shell had begun drilling offshore British Columbia on the west coast, but without success until a moratorium was placed on further drilling to protect the environment. This moratorium is still in operation. Meanwhile off the east coast gas was found on Sable Island, Nova Scotia in 1967 followed by oil at the Cohasset field in 1973. Cohasset went onstream in 1992 but has since been abandoned. The Sable Island fields started producing gas in 1999.

Several significant oil fields were also discovered offshore Newfoundland in the Grand Banks region, the first being Hibernia in 1979, followed by Terra Nova in 1984. The Hibernia field came onstream in 1997 and a number of other fields are now in production or in development whilst exploration is also being carried out further north and in deeper waters.

In the Arctic of northern Canada in the Beaufort Sea and MacKenzie Delta areas gas was discovered at Taglu in 1971 and oil at Amauligak in 1984. A number of finds have been made on Arctic Islands such as gas at Drake Point in 1969 and oil at Bent Horn in 1974. The latter came onstream in 1985. Otherwise Arctic oil and gas remains largely undeveloped due to the huge costs involved and ongoing environmental issues.

History of Exploration