Two of Calgary’s largest energy companies are signalling that Alberta’s oil sands have significant potential for additional production growth, but major new investments will depend on greater certainty around government agreements, carbon policy and future infrastructure.
Canadian Natural Resources has said it will not proceed with its medium and longer term oil sands expansion projects until a recent agreement involving the federal government, Alberta government and major oil sands producers is converted into binding definitive agreements.
Suncor Energy is taking a similarly disciplined approach. The Calgary based producer continues to pursue its existing growth plans, but management has indicated that it is not yet prepared to accelerate those plans based solely on recent policy announcements.
The distinction is important. Neither company is retreating from Alberta. Instead, two of Canada’s largest oil sands producers are signalling that additional multibillion dollar investments require long term certainty.
Canadian Natural Has Several Potential Expansion Projects
Canadian Natural has identified several projects that could add substantial production from its Alberta oil sands portfolio.
One is a proposed expansion at Jackfish that could add approximately 30,000 barrels per day. Reuters reported that the project carries an estimated cost of about $650 million.
Another potential development is Pike 2, which could add approximately 70,000 barrels per day at an estimated cost of roughly $2.5 billion.
Canadian Natural is also considering the much larger Jackpine mine expansion, which could potentially add approximately 150,000 barrels per day.
Combined, those three projects represent approximately 250,000 barrels per day of potential additional production.
However, Canadian Natural President Scott Stauth said in August that the company will not move ahead with its medium and longer term oil sands expansion projects until the recent government and industry memorandum is converted into binding legal agreements.
That does not mean the projects have been cancelled. It means Canadian Natural is waiting for greater certainty before committing substantial amounts of capital.
Source: Reuters, August 6, 2026
What Agreement Is Canadian Natural Waiting For?
On July 2, 2026, Canada, Alberta and five major oil sands producers entered into a new memorandum of understanding.
The participating producers are Canadian Natural Resources, Suncor Energy, Cenovus Energy, Imperial Oil and ConocoPhillips Canada.
The agreement connects several major objectives affecting the future of Alberta’s oil sands, including production growth, carbon capture, emissions reductions and improved access to international markets.
Importantly, the July memorandum is not itself the final binding agreement.
The memorandum states that Canada and Alberta intend to develop future binding definitive agreements with each participating oil sands company, with target signings on or before November 15, 2026.
It also states that the commitments described in the memorandum are conditional upon those definitive agreements being signed.
For companies considering projects that could operate for several decades, that distinction is significant.
Source: Government of Canada, Memorandum of Understanding, July 2, 2026
Suncor Is Continuing Growth, But Not Accelerating Yet
Suncor’s position requires an important clarification.
The company is not stopping production growth.
Suncor continues to pursue plans that could add approximately 100,000 barrels per day of production by 2028.
What Suncor is not doing, at least for now, is accelerating beyond the growth strategy it has already established.
Chief Executive Officer Rich Kruger said in August that the company’s outlook had not changed from the strategy presented at its March investor day. Management wants to see recent government commitments translated into concrete agreements before making decisions about faster expansion.
That is a more precise description of Suncor’s position than saying the company is simply holding back oil sands development.
Source: Reuters, August 5, 2026
The Pathways Project Is Central to the Discussion
One of the most important components of the agreement is the proposed Pathways carbon capture and storage project.
The participating companies intend for the Pathways project to reduce net emissions by approximately 6 million tonnes of carbon dioxide equivalent annually once fully developed.
According to the federal government’s July 2026 backgrounder, the shared transportation and storage infrastructure is expected to be operating by January 1, 2032, with the full 6 million tonnes per year of net reductions expected by January 1, 2035.
The agreement also establishes a broader objective of additional emissions reductions later.
The specific commitments of individual companies are expected to be established through the definitive legal agreements that have not yet been completed.
Source: Government of Canada, July 2026
A New West Coast Pipeline Could Change Alberta’s Growth Outlook
The other major part of the emerging energy strategy is improved pipeline access.
On July 2, 2026, the federal government announced that Alberta’s proposed West Coast Oil Pipeline would be referred to the Major Projects Office.
The proposed pipeline is intended to transport approximately one million barrels of oil per day toward global markets.
Canada and Alberta have explicitly linked the proposed pipeline and the Pathways project. A May 2026 implementation agreement states that construction of the two projects is mutually dependent.
This relationship is particularly important for Alberta producers.
Increasing oil sands production only makes economic sense over the long term if producers have sufficient capacity to transport additional barrels to customers.
A new export pipeline could therefore provide room for substantial future production growth while giving Alberta crude greater access to overseas markets.
The pipeline remains a proposal, however. It should not be described as approved or under construction.
Source: Prime Minister of Canada, July 2, 2026
Canadian Natural Is Still Producing at Record Levels
The cautious approach to future expansion should not be confused with weakness in Canadian Natural’s existing operations.
Canadian Natural reported second quarter 2026 production of approximately 1.68 million barrels of oil equivalent per day.
That compares with approximately 1.42 million barrels of oil equivalent per day during the same quarter in 2025.
The company also increased its 2026 production forecast following strong operating performance.
In other words, the current debate is not about whether Canadian Natural can grow.
It is about how much additional capital the company is prepared to commit to its next generation of large oil sands projects.
Source: Reuters, August 6, 2026
Why This Matters for Calgary
Although the projects themselves are located in northern Alberta, major investment decisions are made in Calgary.
Canadian Natural and Suncor are both headquartered in the city, alongside a large network of engineering companies, financial institutions, environmental consultants, technology businesses and other companies supporting Alberta’s oil and gas industry.
When a major oil sands expansion receives approval, the economic effects extend well beyond the project site.
Engineering and project management work can be performed in Calgary. Alberta fabrication companies can receive new contracts. Construction companies can require additional workers. Equipment suppliers, transportation companies and specialized contractors can see increased demand.
A decision involving tens of thousands of barrels of additional daily production can therefore create business opportunities across a much larger portion of Alberta’s economy.
Why This Matters for Alberta Oilfield Service Companies
The potential projects identified by Canadian Natural alone illustrate the scale of the opportunity.
Jackfish, Pike 2 and the proposed Jackpine expansion could collectively represent approximately 250,000 barrels per day of additional production if all three ultimately proceed as currently contemplated.
Large developments require extensive engineering, construction, equipment, environmental services, electrical work, instrumentation, transportation and ongoing maintenance.
For Alberta service companies, the timing of these investment decisions matters almost as much as oil prices.
The next major wave of oil sands spending could create substantial opportunities, but producers are making clear that they want the regulatory and commercial framework established before committing billions of dollars.
November Could Be an Important Milestone
One date is particularly worth watching.
The July memorandum targets November 15, 2026, for signing the definitive agreements between Canada, Alberta and the participating oil sands companies.
There is no guarantee that every agreement will be completed by that date, and the memorandum itself remains nonbinding.
However, progress toward definitive agreements could provide greater clarity about carbon pricing, government support, regulatory policy and the Pathways project.
That clarity could influence how companies evaluate future expansion opportunities.
The Bigger Alberta Story
Alberta’s oil sands industry is entering a different type of growth cycle.
The question is no longer simply whether companies have enough oil in the ground to expand. The resource base is enormous, and major producers already possess large inventories of potential projects.
The more important questions involve economics, emissions policy, pipeline capacity, regulatory certainty and shareholder returns.
Canadian Natural’s potential expansions demonstrate that significant production growth remains possible.
Suncor’s existing growth plans show that companies are still investing.
The proposed West Coast Oil Pipeline could create substantially more export capacity.
And the Pathways project could become a major component of the industry’s emissions reduction strategy.
For Calgary and Alberta, the next several months could therefore be important.
The opportunity for another significant period of oil sands investment exists. Whether that investment moves forward will depend on governments and industry turning recent announcements into agreements strong enough for companies to commit billions of dollars for decades to come.
Sources:
Reuters, Canadian Natural says oil sands expansions paused until government agreements finalized, August 6, 2026.
Reuters, Suncor not ready to speed output growth, CEO says, despite government’s pro oil stance, August 5, 2026.
Government of Canada, Memorandum of Understanding between Canada, Alberta and the Oil Sands Alliance, July 2, 2026.
Government of Canada, Advancing emissions reductions and expanded export capacity, July 2026.
Prime Minister of Canada, Canada and Alberta advance west coast pipeline project proposal and Pathways Project Carbon Capture Initiative, July 2, 2026.