How will the agreement reached among the federal government, Alberta province, and industry—announced by the Canadian Oil Sands Alliance—affect Canada’s energy transition and the oil sands industry?

First, the project is coming online too late—the buyer’s demand has already shifted. Since TMX reached full capacity, daily crude oil exports to China have reached 207,000 barrels, exceeding the 173,000 barrels shipped to the U.S.; roughly 70% of cargo vessels departing British Columbia in October 2025 are headed for China; and the price differential between WTI and WCS has narrowed from a long-term average of USD 15 to USD 9.95. Yet China is the customer—and the customer is king. Much of China’s recent procurement has been driven by trade-war substitution, sanctions arbitrage, and strategic stockpiling: in 2025, China’s strategic reserves reportedly absorbed nearly 990,000 barrels per day, while mainstream forecasts for 2026 have already dropped to around 600,000 barrels per day. Meanwhile, the new pipeline’s incremental capacity of one million barrels per day won’t come online until after 2032—and by then, the erosion of refined product demand due to China’s rapid new-energy development is already widely acknowledged. So Carney is currently betting on structural demand in 2032. Second, political cycles are shorter than engineering timelines. According to the current schedule, operations begin in 2032 and construction concludes in 2035—spanning at least two federal elections and one Alberta provincial election. The agreement’s lifespan may well hinge on whether three consecutive governments remain in power. Carney currently leads a majority government—but in two years’ time, once his political capital is largely spent, all bets are off. Meanwhile, Alberta Premier Smith remains embroiled in internal divisions within her own United Conservative Party (the ‘Wildrose’ faction), and must first survive this year’s referendum. Over the next decade, any single change in government could render this memorandum of understanding obsolete—a relic of a previous administration. Third, Indigenous communities represent the most inflexible time variable. When Alberta and Ottawa signed their MOU last November, coastal First Nations were not consulted in advance—and when they later requested meetings, they were cold-shouldered by the federal Minister of Natural Resources. The Great Bear Initiative coalition—comprising eight Indigenous nations—along with the Lax Kw’alaams and Haisla Nations, have categorically declared the northern route a 'non-starter', vowing it 'will never be built'. After the northern route was blocked by injunctions, the project pivoted to the southern corridor—the very same Burrard Inlet corridor where TMX fought protracted legal battles for years. Moreover, Indigenous partners enjoy special terms: their equity stake only enters the picture upon 'commercial operation', meaning others bear all upfront political and legal risks while Indigenous groups reap benefits only at the end. The fates of Northern Gateway and Energy East serve as stark warnings. Fourth, this project appears almost entirely state-owned—and the bill will likely fall squarely on taxpayers’ shoulders. Though branded a public-private partnership, 90% of its equity is held by federal and Alberta provincial Crown corporations. The sole private shareholder, Pembina, refuses to commit any risk capital prior to the Final Investment Decision—and has locked in contractual protections against cost overruns. The fact that both levels of government have pledged equal financial backing itself signals weak market appeal. Recall how TMX transformed from a private initiative into a federally funded project whose cost ballooned to CAD 34 billion—a script already played out once before.

Analysis of the 2021 global oil & gas resource M&A market landscape, and recommendations for Chinese petroleum enterprises to strengthen global participation (with chart)

From the perspective of unconventional oil and gas resource M&A in North America, statistics show that in 2021, the total value of global unconventional oil and gas resource M&A transactions amounted to approximately USD 69.3 billion—significantly higher than USD 36.5 billion in 2020. North American Unconventional Oil & Gas Resource M&A Transaction Value, 2016–2021 Source: Publicly available data compilation In 2021, M&A transaction value for North American shale oil assets totaled about USD 47.8 billion, while that for shale gas assets reached approximately USD 20.5 billion; Canadian oil sands-related M&A transactions amounted to only USD 1 billion. North American Unconventional Oil & Gas Resource M&A Transaction Value, 2016–2021 Source: Publicly available data compilation Related report: Huajing Industry Research Institute, 'China Offshore Oil & Gas Resource Development Industry: Market Operations and Investment Strategy Consultation Report, 2021–2026' III. Top Ten Global Oil & Gas Resource M&A Transactions In North America, there were 157 oil and gas resource M&A deals in 2021—101 in the United States, 52 in Canada, and 4 in Mexico. In terms of transaction value, North America accounted for USD 87 billion in total deal value for the year—representing 62.8% of the global market. Of the top ten global oil and gas resource M&A transactions in 2021, six occurred in the U.S., one in Canada, and their combined value totaled approximately USD 34 billion. Top Ten Global Oil & Gas Resource M&A Transactions in 2021 Source: Publicly available data compilation IV. Implications for Chinese Petroleum Enterprises Since 2018, China’s major petroleum enterprises have actively responded to national policy directives, continuously intensifying domestic oil and gas exploration and development efforts—with notable breakthroughs achieved. According to disclosures from the 2021 National Energy Work Conference, China’s crude oil output in 2021 stood at 199 million tonnes—marking three consecutive years of growth—while natural gas output reached approximately 206 billion cubic meters, representing five consecutive years of annual growth exceeding 10 billion cubic meters, sustaining robust momentum. Today, China ranks among the world’s largest oil and gas consumers. To fully safeguard national energy supply security—and simultaneously enhance current operational performance and long-term sustainable development capacity—Chinese petroleum enterprises should further strengthen their participation in the global oil and gas resource M&A market, leveraging overseas transactions to acquire high-quality assets. From an upstream investment perspective, amid a sustained decline in upstream investment since 2014, the global upstream sector faces a potentially severe resource replacement challenge in the near future. Statistics indicate that exploration drilling activity in 2021 remained broadly flat compared to 2020, yet newly discovered conventional oil and gas reserves fell nearly 60% year-on-year—to just 4.9 billion barrels of oil equivalent—the lowest level in 75 years. Thus, active participation in today’s global oil and gas resource M&A market represents an effective pathway for Chinese oil companies to secure overseas upstream resource replacement. From a transaction pricing perspective, although the average benchmark oil price used in valuing 2021 global oil and gas M&A deals edged slightly higher than in 2020, it remains within the lowest volatility range observed since 2007. In other words, the window of opportunity remains open for Chinese petroleum enterprises to participate in the global oil and gas M&A market—and favorable conditions still exist to acquire high-quality overseas oil and gas assets at reasonable prices.

Strathcona Resources Agrees to Acquire Greenfire Resources in Canadian Oil Sands Deal

14 hours ago

Strathcona Resources has agreed to acquire Greenfire Resources in a deal valued between C$2.7 billion and C$2.9 billion. The combination will form Canada's fourth-largest oil sands operator with over 3 million barrels of proven reserves.

bloomberg

2026-11-08

Strathcona Resources Agrees to Acquire Greenfire Resources in Canadian Oil Sands Deal

Strathcona Resources Agrees to Acquire Greenfire Resources in Canadian Oil Sands Deal

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