Total revenue for the Canadian oil and gas extraction industry rose 4.9 per cent to $123.5 billion in 2018, following a 35.5 per cent increase in 2017, but total expenses were $137.4 billion (up 25.6 per cent), resulting in a net loss of $13.9 billion, says Statistics Canada in a report released Wednesday.
“Total operating expenses increased 13.0 per cent to $45.7 billion in 2018, following a 1.9 per cent decline in 2017. Operating expenses in the oil sands sector (formerly non-conventional oil extraction) were up 17.6 per cent to $21.8 billion, while operating expenses in the oil and gas extraction sector (formerly conventional oil extraction) increased 9.1 per cent to $23.9 billion. Royalty payments totalled $7.6 billion in 2018, up 14.4 per cent from $6.6 billion in 2017,” said the federal agency.
The report said capital expenditures in the oil and gas extraction industry decreased eight per cent to $39.1 billion in 2018 with the decline attributable to a 15.5 per cent decrease in spending by the oil sands sector to $11.7 billion. This decrease was due in part to the completion of two major oil sands projects, Fort Hills and Horizon, which came on line at the start of 2018.
“Meanwhile, capital spending by the oil and gas extraction sector (conventional) fell 4.4 per cent compared with the previous year,” it said.
StatsCan explained that production volumes for crude oil, equivalent products and natural gas increased in 2018. Over the same period, the overall value of these products rose 9.4 per cent to $116.7 billion.
“Production of crude oil and equivalent products was up 8.7 per cent to 251.8 million cubic metres in 2018, and the market value of these products rose 13.4 per cent to $94.5 billion. Higher industrial prices for crude oil were a contributing factor to the increase in value. According to the Raw Materials Price Index, the average annual price of crude oil and crude bitumen increased 20.5 per cent year over year, following a 19.4 per cent increase in 2017,” said the federal agency.
“Marketable production of natural gas increased 3.9 per cent to 172.7 billion cubic metres, while the value of natural gas decreased 30.1 per cent to $8.8 billion in 2018. Over the same period, production of natural gas by-products rose 10.1 per cent to 52.5 million cubic metres, while the value of these products increased 24.8 per cent to $13.5 billion.”
Statistics Canada said total assets in the industry, including cash, accounts receivable, inventories, buildings and machinery, reported by oil and gas companies operating in Canada were down 3.1 per cent in 2018 to $556.1 billion. Over the same period, total liabilities, which include such items as current portion of long-term debt, accounts payable and notes payable, increased 2.0 per cent. Equity, including common shares and retained earnings, decreased 9.4 per cent.
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