Canada

Investment & Operational Criteria

Key Indicators

Risk Premia

5.000

%

Outlook

Negative

Rating

AA|1S|-

Ranking

8

Reserves (1P)

Total

mm boe

Oil

93

%

Summary

While generally a benign operating environment for O&G investment, recent changes to the tax regime and approach to the O&G sector creates a belief that the government is hostile to oil & gas. Consequently, Canada has an elevated risk premium and a Outlook Negative.

Updated

May 19, 2021

Country Basics

Region

Americas - North

Reserves (1P)

Oil

mm bbl

Gas

bcf

Location

CanadaCanada

Northern North America, bordering the North Atlantic Ocean on the east, North Pacific Ocean on the west, and the Arctic Ocean on the north, north of the conterminous US.

Outline

Tax Regime
Type

Concession

Tax Regime
Notes

Concession-based fiscal regime. Signature bonuses are payable and are used as the basis of awarding leases. The contractor pays royalty on both oil and gas production, and federal and provincial income taxes.

Investment & 
Operational
Climate

The full impact of COVID-19 on Canada’s economy is yet to be seen. Private sector analysts predict Canada’s GDP will shrink between 1 and 6% in 2020. IMF’s April 2020 World Economic Outlook forecasts Canada’s annual GDP in 2020 will contract by 6.2%. A majority of small- and medium-sized enterprises are responding to steep declines in sales and mandated closures with layoffs, with more than 44% indicating on April 14 they might not survive should business restrictions remain in place until the end of May. Despite a rapidly changing business environment, borders and supply chains are functioning well.

Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.

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