Ontario-Alberta Oil Explorations Limited - Stock Certificate

Stock printed by Canadian Bank Note Company Limited.

Petroleum production in Canada is a major industry which is important to the economy of North America. Canada has the third largest oil reserves in the world and is the world's fourth largest oil producer and fourth largest oil exporter. In 2019 it produced an average of 750,000 cubic metres per day (4.7 Mbbl/d) of crude oil and equivalent. Of that amount, 64% was upgraded and non-upgraded bitumen from oil sands, and the remainder light crude oil, heavy crude oil and natural-gas condensate. Most of Canadian petroleum production is exported, approximately 600,000 cubic metres per day (3.8 Mbbl/d) in 2019, with 98% of the exports going to the United States. Canada is by far the largest single source of oil imports to the United States, providing 43% of US crude oil imports in 2015.

The petroleum industry in Canada is also referred to as the "Canadian Oil Patch"; the term refers especially to upstream operations (exploration and production of oil and gas), and to a lesser degree to downstream operations (refining, distribution, and selling of oil and gas products). In 2005, almost 25,000 new oil wells were spudded (drilled) in Canada. Daily, over 100 new wells are spudded in the province of Alberta alone. Although Canada is one of the largest oil producers and exporters in the world, it also imports significant amounts of oil into its eastern provinces since its oil pipelines do not extend all the way across the country and many of its oil refineries cannot handle the types of oil its oil fields produce. In 2017 Canada imported 405,700 bbl/day (barrels per day) and exported 1,115,000 bbl/day of refined petroleum products.

The Canadian petroleum industry developed in parallel with that of the United States. The first oil well in Canada was dug by hand (rather than drilled) in 1858 by James Miller Williams near his asphalt plant at Oil Springs, Ontario. At a depth of 4.26 metres (14.0 ft) he struck oil, one year before "Colonel" Edwin Drake drilled the first oil well in the United States. Williams later went on to found "The Canadian Oil Company" which qualified as the world’s first integrated oil company.

Petroleum production in Ontario expanded rapidly, and practically every significant producer became his own refiner. By 1864, 20 refineries were operating in Oil Springs and seven in Petrolia, Ontario. However, Ontario's status as an important oil producer did not last long. By 1880 Canada was a net importer of oil from the United States.

Canada's unique geography, geology, resources and patterns of settlement have been key factors in the history of Canada. The development of the petroleum sector helps illustrate how they have helped make the nation quite distinct from the United States. Unlike the United States, which has a number of different major oil producing regions, the vast majority of Canada's petroleum resources are concentrated in the enormous Western Canadian Sedimentary Basin (WCSB), one of the largest petroleum-containing formations in the world. It underlies 1,400,000 square kilometres (540,000 sq mi) of Western Canada including most or part of four western provinces and one northern territory. Consisting of a massive wedge of sedimentary rock up to 6 kilometres (3.7 mi) thick extending from the Rocky Mountains in the west to the Canadian Shield in the east, it is far distant from Canada's east and west coast ports as well as its historical industrial centres. It is also far from American industrial centres. Because of its geographic isolation, the area was settled relatively late in the history of Canada, and its true resource potential was not discovered until after World War II. As a result, Canada built its major manufacturing centres near its historic hydroelectric power sources in Ontario and Quebec, rather than its petroleum resources in Alberta and Saskatchewan. Not knowing about its own potential, Canada began to import the vast majority of its petroleum from other countries as it developed into a modern industrial economy.

The province of Alberta lies at the centre of the WCSB and the formation underlies most of the province. The potential of Alberta as an oil-producing province long went unrecognized because it was geologically quite different from American oil producing regions. The first oil well in western Canada was drilled in southern Alberta in 1902, but did not produce for long and served to mislead geologists about the true nature of Alberta's subsurface geology. The Turner Valley oil field was discovered in 1914, and for a time was the biggest oil field in the British Empire, but again it misled geologists about the nature of Alberta's geology. In Turner Valley, the mistakes oil companies made led to billions of dollars in damage to the oil field by gas flaring which not only burned billions of dollars worth of gas with no immediate market, but destroyed the field's gas drive that enabled the oil to be produced. The gas flares in Turner Valley were visible in the sky from Calgary, 75 km (50 mi) away. As a result of the highly visible wastage, the Alberta government launched vigorous political and legal attacks on the Canadian Government and the oil companies that continued until 1938 when the province set up the Alberta Petroleum and Natural Gas Conservation Board and imposed strict conservation legislation.

The status of Canada as an oil importer from the US suddenly changed in 1947 when the Leduc No. 1 well was drilled a short distance south of Edmonton. Geologists realized that they had completely misunderstood the geology of Alberta, and the highly prolific Leduc oil field, which has since produced over 50,000,000 m³ (310,000,000 bbl) of oil was not a unique formation. There were hundreds more Devonian reef formations like it underneath Alberta, many of them full of oil. There was no surface indication of their presence, so they had to be found using reflection seismology. The main problem for oil companies became how to sell all the oil they had found rather than buying oil for their refineries. Pipelines were built from Alberta through the Midwestern United States to Ontario and to the west coast of British Columbia. Exports to the U.S. increased dramatically.

Most of the oil companies exploring for oil in Alberta were of U.S. origin, and at its peak in 1973, over 78 per cent of Canadian oil and gas production was under foreign ownership and over 90 per cent of oil and gas production companies were under foreign control, mostly American. This foreign ownership spurred the National Energy Program under the Trudeau government.

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