Market Overview

Oil Drilling and Gas Extraction in Canada Industry Market Research Report Now Available from IBISWorld


Over the next five years, Canada will continue to rely on the United States for a significant portion of crude oil and natural gas sales; continued growth in production in oil sands will also facilitate a projected revenue increase. For these reasons, industry research firm IBISWorld has added a report on the Oil Drilling and Gas Extraction industry to its growing industry report collection.

Los Angeles, CA (PRWEB) February 25, 2013

The Oil Drilling and Gas Extraction industry in Canada depends most heavily on crude oil prices and natural gas prices. Typically, as oil and gas prices surge, industry revenue and profitability rise. On the other hand, slumping prices flow through to suppressed revenue and profitability. Over the past five years, the industry has been marked by the extreme volatility associated with these commodity prices. In 2013, crude oil will account for 78.8% of industry revenue, compared with natural gas's share of 21.2%. Overall, crude oil prices in Canada have been extremely volatile over the past five years. According to the Canadian government, average Edmonton Par Crude oil prices have fallen at an annualized rate of 1.7% over the five years to 2013. “The price of natural gas has fallen steadily since 2008, exacerbating the effect of softening crude oil prices on industry revenue,” says IBISWorld industry analyst Antonio Danova. “This effect has led to an overall decline in industry revenue of 2.5% per year on average to about $133.1 billion.” Nonetheless, crude oil prices will remain high in 2013, helping revenue grow an anticipated 2.7% for the year.

Market share concentration within the Oil Drilling and Gas Extraction industry is low; only major player Suncor will have a significant market share. The industry consists of many large, multinational energy companies that operate on a global scale. “The dispersion of the industry across Canada as well as the global-scale in which its companies compete on are representative of an industry with low market share concentration,” adds Danova. “These characteristics make it difficult for even major oil companies to control more than a small share of output.” Over the past five years, market share concentration has increased as a result of consolidation taking place in the sector. High crude oil prices laid the basis for firms to expand operations to meet demand.

Industry firms depend heavily on demand from the United States. In 2013, US exports will make up 99.1% of total exports of crude oil and natural gas. Moreover, exports account for roughly 65.8% of industry revenue in 2013. Canada is the largest supplier of oil to the United States and demand from the United States for Canadian imports has grown as US energy strategies have called for less dependence on foreign oil suppliers like Venezuela and the Middle East. Nonetheless, US exports have also been extremely volatile, exacerbating the volatility in crude oil and natural gas prices. For example, exports spiked 39.1% in 2008 then dipped 40.6% the following year in 2009, with the United States contributing over 98.0% of exports in both years.

Over the next five years, Canada will continue to rely on the United States for a significant portion of crude oil and natural gas sales. The Canadian government cites increased development and production of the country's rich oil sands. Canada currently holds the world's third-largest proven reserves at 172.8 billion barrels, 168.7 billion of which are in the oil sands. These oil sands could eventually grow up to 315 billion barrels. Continued growth in production from these oil sands will facilitate a projected revenue increase over the five years to 2018. For more information, visit IBISWorld's Oil Drilling and Gas Extraction in Canada industry report page.

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IBISWorld industry Report Key Topics

Firms in this industry operate and develop oil and gas field properties. Activities include the exploration and production of crude petroleum; the mining and extraction of oil from oil shale and oil sands; the exploration and production of natural gas; sulfur recovery from natural gas; and recovery of hydrocarbon liquids. Firms may operate oil and gas wells on their own account or for others on a contract or fee basis.

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About IBISWorld Inc.
Recognized as the nation's most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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