Canada’s oil and gas sector has attracted intensified interest from large international energy companies in recent weeks, with Shell’s proposed $16.4 billion purchase of ARC Resources serving as the most visible sign of this shift. Executives at TotalEnergies, ConocoPhillips, Equinor and BP have been reported to be reassessing Canadian assets, and bankers say several of these firms have asked for lists of potential acquisition targets, according to people familiar with the conversations.
The renewed focus marks a reversal of a years-long trend in which many foreign operators partially or fully pulled back from Canadian fossil fuel production. For much of the past decade, limited pipeline and export capacity and investor concerns over the environmental footprint of heavy oil from Alberta’s oil sands contributed to that exodus.
But a combination of external shocks and domestic policy shifts has altered the investment calculus. The conflict in the Middle East and the closure of the Strait of Hormuz have heightened the strategic value of Canada, the world’s fourth-largest oil producer, as companies seek more secure supply options. At the same time, the country’s leadership has become more supportive of oil and gas development since Prime Minister Mark Carney took office, rolling back some climate rules and pledging to help grow the industry.
Shell’s ARC agreement is the first concrete proof of that broader reappraisal. ARC is the largest natural gas producer focused solely on the Montney shale region, and the planned transaction would rank among the biggest foreign purchases of a Canadian energy company. Mike Verney, executive vice president at Calgary-based energy consultancy McDaniel & Associates, said the Shell move was "an indication that we have tremendous, world quality resources," and that foreign interest was "validating."
People interviewed for this analysis - most of whom asked not to be identified because the discussions are private - said the renewed attention is being driven in part by newly completed or expanding export routes for both crude and natural gas that make Canada more attractive as an export hub. Developers and investors are weighing the potential upside of upstream assets that could supply growing LNG capacity on the Pacific coast.
One key attraction is Canada’s emerging liquefied natural gas export capacity. Shell and its partners began producing from LNG Canada last June, and a decision on whether to advance the project’s second phase is expected soon. Total acquired a stake last year in the proposed Ksi Lisims LNG project on British Columbia’s northwest coast, which, if approved, could become Canada’s second-largest LNG export terminal. Involvement in these projects is prompting interest in upstream supplies, particularly in the Montney shale play.
The Montney, which spans northeast British Columbia and northwest Alberta, is a major driver of Canada’s gas output. The formation produces about 10 billion cubic feet per day, equal to roughly 50% of Canada’s total natural gas production. For context, U.S. Permian basin gas production stands at about 25 billion cubic feet per day, according to U.S. data cited by sources.
Despite the renewed interest, sources cautioned that there is no guarantee other majors will immediately follow Shell with acquisitions, particularly given recent market volatility. Some firms have taken a cautious approach, asking bankers to prepare acquisition lists without committing to imminent deals. TotalEnergies and Equinor did not immediately respond to requests for comment, and BP and ConocoPhillips declined to comment.
The shift to foreign participation reverses a decade in which ownership of the oil sands became more concentrated in Canadian hands. A Bank of Montreal analysis referenced by sources showed Canadian ownership in the oil sands rising to approximately 89% in 2025 from 69% in 2016. That consolidation followed departures by major international companies driven by investor unease over the environmental impact of heavy, tar-like crude production.
Market dynamics are also shaping which assets could change hands. With ARC now under offer, the pool of large, obvious takeover targets has narrowed. One widely mentioned candidate is Tourmaline Oil, Canada’s largest natural gas producer, with a market value around C$18 billion, equivalent to $13.2 billion by the exchange rates cited. Tourmaline’s shares have been flat over the past year and the company is led by 68-year-old Chief Executive Mike Rose. Some sources said a sale of Tourmaline could address succession issues; the company declined to comment.
Beyond potential blockbuster deals, majors could pursue roll-ups of smaller producers or targets backed by private equity. Such activity would seek to build scale and align upstream supplies with expanding LNG export capacity on the west coast.
Higher crude prices have improved the financial capacity of major producers to consider acquisitions. Yet the availability of suitable targets, combined with market volatility and private, confidential discussions among potential bidders, means that the pace and scale of new foreign investment in Canada remain uncertain.
Legal and industry advisers point to Canada’s array of untapped resources as a central element of its appeal. Jose Valera, a partner at law firm Mayer Brown, highlighted the country’s strengths when global energy markets appear vulnerable, saying "When you want energy and you look at the world and what could go wrong, Canada has a lot of things going for it."
In sum, the landscape for Canadian oil and gas investment is in the midst of a recalibration. Shell’s ARC Resources transaction stands as a visible signal that foreign majors are once again seriously considering holdings in Canada, driven by export infrastructure developments, large undeveloped resource bases, and a federal government more inclined to support industry growth. At the same time, market volatility, the shrinking set of large targets and lingering investor concerns over environmental issues leave substantial uncertainty about how quickly and how broadly foreign capital will return.