Saskatchewan’s oil and gas industry is a cornerstone of the province’s economy, positioning it as Canada’s second-largest oil producer and a significant player in North America’s energy landscape. Known for its vast reserves, innovative technologies, and strategic growth initiatives, the industry continues to drive economic prosperity while navigating environmental and market challenges. This article explores the industry’s production levels, types of production, key geological formations, primary production areas, and expected growth trends as of 2025.
Production Levels
In 2023, Saskatchewan produced an average of 457,000 barrels per day (bpd) of crude oil, including condensate and pentanes plus, accounting for approximately 13.5% of Canada’s total oil production. Natural gas production, while less dominant, reached 309.7 million cubic feet per day (MMcf/d) in the same year, a decline from 410 MMcf/d in 2013. The province’s oil production has remained relatively stable over the past two decades, fluctuating between 425,000 and 525,000 bpd, a notable achievement given natural declines in mature fields. In 2024, the industry generated $13.5 billion in revenue, supporting over 26,000 jobs and contributing $34.1 billion in federal and provincial taxes and royalties.
However, early 2025 data indicates a production dip, with February 2025 oil output decreasing by 7.5% compared to February 2024. Regional declines included Estevan (-3.5%), Kindersley (-14.3%), Lloydminster (-6.0%), and Swift Current (-14.1%). By oil type, light oil production fell by 8.2%, medium by 10.6%, and heavy by 6.1%. Despite this, Saskatchewan’s long-term goal is to increase crude oil production to 600,000 bpd by 2030, a 31% rise from 2023 levels, as outlined in the province’s Growth Plan.
Types of Production
Saskatchewan’s oil production is diverse, encompassing light, medium, and heavy crude oil, with light crude being the most significant due to its ease of refining compared to heavier crudes like those in Alberta’s oil sands. The province is a leader in conventional oil production, with an estimated 1.2 billion barrels of oil reserves. Heavy crude dominates in the Lloydminster area, while light crude is prevalent in regions like Kindersley and Weyburn-Estevan.
Natural gas production, though secondary to oil, is significant, with 44% of Saskatchewan’s energy generation derived from natural gas in 2023. Most natural gas is produced as a byproduct (solution gas) from oil wells in formations like the Bakken and Viking, with historical production centered in the southwest (Swift Current region). The province’s recoverable, sales-quality gas is estimated at 13.4 trillion cubic feet (Tcf), with 4.7 Tcf remaining as of 2021. Saskatchewan’s natural gas is predominantly dry, containing minimal natural gas liquids like ethane or propane.
The province also produces synthetic crude oil through upgrading facilities in Lloydminster (Husky Energy) and Regina (Federated Co-op), which convert heavy oil into lighter, higher-value products. Additionally, Saskatchewan is exploring helium production, with historical data from 1960–1977 and current data available through the Integrated Resource Information System (IRIS).
Key Geological Formations
Saskatchewan’s oil and gas production is primarily sourced from the Western Canadian Sedimentary Basin (WCSB), which underlies about 25% of the province. Key formations include:
- Bakken Formation: A major conventional oil play spanning southeast Saskatchewan and North Dakota, known for light crude oil production via hydraulic fracturing. It is one of North America’s largest oil plays, with significant reserves estimated at 95 billion barrels in the Lloydminster area alone.
- Viking Formation: Produces light crude oil and associated solution gas, primarily in west-central Saskatchewan (e.g., Kindersley). It is a key target for tight oil production using advanced drilling techniques.
- Frobisher Formation: Located in southeast Saskatchewan, it has seen stable production, averaging around 40,000 bpd in 2024, slightly higher than a decade ago. It is the most targeted formation for new drilling licenses, with 200 licenses issued in the past year.
- Midale Formation: Also in southeast Saskatchewan, it is a significant producer alongside the Frobisher, though production has declined in recent years.
- Other Formations: The Mannville Group and Shaunavon Formation contribute to heavy and light oil production, particularly in Lloydminster and Swift Current.
These formations are accessed using advanced technologies like horizontal drilling and hydraulic fracturing, which enhance recovery rates from tight rock formations.
Primary Production Areas
Saskatchewan’s oil and gas production is concentrated in four major regions:
- Lloydminster (West-Central): Known for very heavy crude oil, with fields crossing the Alberta-Saskatchewan border. It hosts significant upgrading facilities and is a hub for companies like Cenovus Energy, Baytex Energy, and IPC Energy.
- Kindersley-Kerrobert (South-Central): Produces light crude oil from the Bakken and Viking formations, leveraging hydraulic fracturing. Teine Energy and Strathcona Resources are active here.
- Swift Current (Southwest): Focuses on conventional oil and natural gas production. It has historically been a gas-producing region but now also yields solution gas from oil wells.
- Weyburn-Estevan (Southeast): A hub for light crude oil production, utilizing carbon dioxide flooding in the Weyburn-Midale Carbon Dioxide Project, the world’s largest carbon capture and storage initiative. Key players include Whitecap Resources, Crescent Point Energy, and Vermillion Energy.
These regions are supported by an extensive pipeline network and refining infrastructure, including an 80,000 bpd refinery in Regina and an asphalt refinery in Moose Jaw.
Expected Growth and Initiatives
Saskatchewan’s government is actively promoting industry growth through initiatives like the Low Productivity and Reactivation Oil Well Program (LPRP), launched in 2025. The LPRP offers royalty incentives for reactivating low-producing or inactive wells, aiming to boost incremental oil production and reduce environmental liabilities. It is projected to save companies like Saturn Oil and Gas up to $400,000 in 2025, with potential savings of millions annually if extended beyond 2029. The program aligns with the province’s goal of reaching 600,000 bpd by 2030, supported by a competitive regulatory environment and targeted incentives.
Technological advancements are driving efficiency and sustainability. Horizontal drilling and hydraulic fracturing have increased recovery rates, while digital tools like AI, big data analytics, and automation optimize operations and reduce costs. Saskatchewan is also a leader in carbon capture, utilization, and storage (CCUS), with the Boundary Dam project serving as a model for reducing emissions in oil and gas operations.
However, challenges remain. Global market volatility, low oil prices, and regulatory pressures, such as the proposed federal emissions cap requiring a one-third reduction in greenhouse gas emissions by 2032, could hinder investment and growth. Methane emissions from cold heavy oil production with sand (CHOPS) operations are also a concern, with studies suggesting underreporting in national inventories. Despite these hurdles, the industry’s focus on capital discipline, customer centricity, and technology investments is expected to support robust growth in 2025 and beyond.
Conclusion
Saskatchewan’s oil and gas industry remains a vital economic engine, leveraging its vast reserves in the Bakken, Viking, Frobisher, and Midale formations to produce light, medium, and heavy crude oil, alongside natural gas and synthetic products. With production centered in Lloydminster, Kindersley, Swift Current, and Weyburn-Estevan, the province is poised for growth through initiatives like the LPRP and advancements in technology and CCUS. While facing environmental and market challenges, Saskatchewan’s strategic vision to reach 600,000 bpd by 2030 underscores its commitment to sustaining and expanding its role in Canada’s energy sector.
