December 12, 2025 [Oil Price]- Cenovus Energy expects its upstream production to rise by about 4% in 2026 compared to this year as it is completing new projects and adding assets of MEG Energy, which it recently acquired.

Cenovus Energy’s 2026 capital budget released on Thursday showed that the Canadian major sees its upstream production at between 945,000 barrels of oil equivalent per day (boe/d) and 985,000 boe/d next year, up by about 4% from 2025, adjusted for the acquisition of MEG Energy Corp.

Of the volumes expected next year, oil sands output will represent the majority, or 755,000 boe/d – 780,000 boe/d. 

“Following the completion of a three-year growth investment cycle, we are well positioned to ramp up volumes from our projects at Foster Creek and West White Rose and advance the in-flight expansion at our newly acquired Christina Lake North assets,” Cenovus president and CEO Jon McKenzie said. 

Another major Canadian oil sands producer, Suncor Energy, also expects to grow its upstream production next year under its 2026 corporate guidance.

Also on Thursday, Suncor Energy said it sees annual upstream production of between 840,000 and 870,000 barrels per day (bpd) in 2026, up by more than 100,000 bpd compared to 2023. Suncor’s output at oil sands projects only is forecast at 785,000 bpd – 810,000 bpd.

Despite lower oil prices, Canada’s oil sands production is projected to reach record highs in 2025 and continue growing, driven by optimization of existing assets and increased pipeline capacity. 

Encouraged by the expanded Trans Mountain pipeline, which increased takeaway capacity from Alberta to the British Columbia coast and to global markets, Canadian producers are raising output even as oil prices have declined by about 20% so far this year.

Oil producers are boosting their oil sands production if they aren’t starting up major new projects. The secret sauce appears to be reducing maintenance times and extending maintenance cycles to squeeze more oil and raise efficiencies.

Despite lower oil prices, Canada’s oil sands production is expected to reach an annual all-time high of 3.5 million bpd this year, thanks to optimization and efficiency at producing assets, S&P Global Commodity Insights said in June in its latest outlook.