Energy service group predicts lower industry spending, but sees reason for optimism

CALGARY – An oil and gas service industry group predicts lacklustre prices for those resources will weigh on spending and activity next year, but the prospect of new export infrastructure gives reason for optimism ahead.

“There is good news on the horizon,” Enserva president and CEO Gurpreet Lail told reporters Wednesday. 

“It’s not right at this moment in time, but it there is going to be good news coming up,” she said. 

Enserva said in its annual State of the Industry report that total oil and gas capital spending is expected to drop by 5.6 per cent this year versus last, and by a further 2.2 per cent in 2026. 

Total wells drilled this year are on track to be nine per cent lower than a year ago, with the biggest drop in British Columbia at 16 per cent. 

But with more liquefied natural gas export capability coming online next year, B.C. drilling is set to partly rebound by six per cent next year. 

The first phase of LNG Canada in Kitimat, B.C., a partnership between Shell and four Asian companies, shipped its first cargoes this summer and production is expected to ramp up in 2026. 

Drilling in Alberta is expected to be seven per cent lower this year versus last, with Saskatchewan seeing a 10 per cent drop this year and both provinces poised to have another four per cent fewer wells in 2026. 

Service-sector employment was strong through the middle of this year, but it’s since been on the decline and is forecast to remain flat through 2026.

“We’re going to take a little bit of a dip in activity, but that activity will come back online once LNG starts moving and we have more progress through B.C.,” said Lail. 

Randy Ollenberger, managing director at BMO Capital Markets, said there’s more optimism around natural gas than oil at the moment, given the export opportunities currently available to producers of each commodity. 

“As we build more LNG facilities, we can expand production, drill more wells to facilitate that and fill up those new facilities,” he told reporters. 

“On the oil side, we’re talking about modestly expanding the existing infrastructure.”

LNG Canada could make a decision on the second phase of its plant next year, and other projects under construction on the West Coast are set to come on stream in 2027 and 2028. Ollenberger said the growth could amount to as much as six million mmBTUs a day, which would be a “pretty material lift.” 

Meanwhile, Enbridge Inc. and Trans Mountain Corp. are looking to increase throughput on their existing networks in the order of 500,000 barrels a day over the next five years. That should serve current production forecasts through to 2030, “ut I think the key thing to remember here is that we could be producing so much more,” Ollenberger said.

He said Western Canada has the potential to produce 3.8 million barrels a day more, but only if producers are confident they can get their oil to market. The new northwest B.C. pipeline proposal Alberta is pursuing, which could ship up to one million barrels a day, is a long way off from becoming a reality, even with an expected accord with the federal government expected Thursday, Ollenberger added. 

“If we had a new oil pipeline and we knew that pipeline was going be competitive from a tolling perspective, I think the industry would follow through, make those investments and it would generate positive economic growth for Canada.”

This report by The Canadian Press was first published Nov. 26, 2025.