International oil giants are turning their attention back to Canada’s energy sector as ongoing Middle East conflicts make the North American nation appear increasingly attractive for major investments, with Shell’s massive $16.4 billion acquisition of ARC Resources serving as the most prominent example of this strategic shift.
Major corporations including TotalEnergies and ConocoPhillips are reportedly examining potential Canadian acquisition opportunities, joined by Equinor and BP in reassessing the market. Investment banking sources indicate these companies have recently requested detailed analyses of viable takeover candidates, according to discussions with twelve industry insiders.
This renewed attention marks a dramatic reversal from the past ten years, during which international firms systematically reduced or eliminated their Canadian fossil fuel investments. Canada’s political landscape has become more favorable to oil and gas development since Prime Minister Mark Carney assumed leadership amid the Iran conflict, as investors increasingly prioritize stable operating environments. The nation has also established new export infrastructure for both crude oil and natural gas that could accelerate additional development, while maintaining extensive untapped resources to fuel expanding export operations.
Shell’s ARC acquisition represents the first tangible evidence of this broader strategic reassessment. The European energy major announced Monday its intention to acquire ARC, Canada’s leading natural gas producer concentrated exclusively in the Montney shale formation, in what would rank among the largest foreign acquisitions of a Canadian energy company in history.
“The fact they (Shell) are buying in Canada is an indication that we have tremendous, world quality resources,” stated Mike Verney, executive vice president at Calgary-based energy consultancy McDaniel & Associates, describing the foreign attention as “validating.”
However, industry sources caution that recent market instability means Total and other companies may not immediately pursue similar acquisitions. Most individuals who spoke with reporters requested anonymity due to the confidential nature of ongoing discussions.
TotalEnergies and Equinor have not responded to comment requests, while BP and ConocoPhillips declined to provide statements.
DEPARTURE AND COMEBACK
Canada’s constrained pipeline infrastructure and export limitations previously made it less attractive compared to U.S. shale developments, renewable energy projects, and other growth sectors. The world’s largest energy corporations particularly avoided Alberta’s oil sands – the country’s primary oil-producing area – due to investor concerns about the environmental consequences of extracting heavy, viscous crude.
This exodus concentrated Canada’s energy industry under domestic control, with Canadian ownership of oil sands operations increasing to roughly 89% in 2025 from 69% in 2016, based on Bank of Montreal research.
Current domestic policies and international conflicts have now shifted in Canada’s favor. Disruptions around the closed Strait of Hormuz have enhanced the appeal of the world’s fourth-largest oil producer as a more secure option for international energy companies. Carney has also adopted a more supportive approach toward oil and gas development compared to predecessor Justin Trudeau, promising industry growth assistance and reversing certain climate regulations.
“When you want energy and you look at the world and what could go wrong, Canada has a lot of things going for it,” observed Jose Valera, a partner at law firm Mayer Brown.
ACQUISITION TARGETS
Canada’s developing liquefied natural gas export capabilities from Pacific coast facilities, providing direct shipping routes to Asian markets, represent a major attraction for investors.
Total purchased an ownership stake last year in the proposed Ksi Lisims LNG project along British Columbia’s northwest coastline, which could become Canada’s second-largest LNG export facility if approved. Shell and its partners initiated production from LNG Canada last June, with a decision on the project’s second phase anticipated shortly.
Participation in these projects is driving investors to examine upstream assets that supply these facilities, particularly opportunities within the Montney formation – a vast shale region covering northeast British Columbia and northwest Alberta, according to two sources. While the area is currently controlled by ARC, Tourmaline Oil, and other domestic producers, it remains significantly less developed than U.S. formations like the Permian Basin.
As the world’s fifth-largest natural gas producer, Canada’s Montney formation generates approximately 10 billion cubic feet daily, representing roughly 50% of the nation’s total production. The Permian Basin produces about 25 billion cubic feet per day by comparison, according to U.S. government data.
Rising crude oil prices are providing major companies with enhanced financial resources for acquisitions, though available takeover targets remain limited with ARC no longer available.
Canada’s largest natural gas producer Tourmaline Oil emerges as a potential acquisition target, three sources indicated. The C$18 billion ($13.2 billion) company’s stock price has remained stagnant over the past year, and is managed by 68-year-old Chief Executive Mike Rose. A potential sale could address succession planning concerns, some sources noted.
Tourmaline declined to provide comment.
Major companies could also consolidate smaller producers, including those backed by private equity firms.
