CPP Investments manages approximately CA$114 billion in assets across Canada. Its holdings span hundreds of companies in sectors including technology, financial services, natural resources, renewables, and infrastructure. This article is the second in Mapping Canadian Capital, a new series from CPP Investments Insights Institute. Each installment spotlights an investment from CPP Investments’ Canadian portfolio, offering insight into how a major global capital allocator approaches long-term partnership, value creation, and the complexities of investing in an evolving economic landscape.
Canada is an energy powerhouse—and Canadian Natural Resources Limited is one of its strongest engines.
Generating more than one and a half million barrels of oil equivalent production per day, Canadian Natural is the country’s largest crude oil producer and second largest natural gas producer. It’s also a significant employer of more than 11,000 employees and supports over 57,000 indirect service provider jobs, the majority in Western Canada.
That scale, alongside the maturity and resiliency of its assets and the quality of its leadership, is part of what makes Canadian Natural a powerful investment for CPP Investments.
“Over the past 37 years, we’ve grown organically and through opportunistic acquisitions,” said Scott Stauth, President of Canadian Natural. “Our people and our unique culture are big drivers on our mission to continue building a world class company. With all employees also shareholders, there is a collective focus on creating value.”
Financially restructured in 1989, Calgary-headquartered Canadian Natural operates in all four Western provinces. It consistently ranks among the top companies in terms of capital expenditure in Alberta, with fully built-out oil sands assets. In addition, it has international operations in the North Sea and offshore West Africa, reinforcing its position as a global energy player.
These attributes have helped Canadian Natural deliver top-tier returns and long-term production stability.
A strategic turning point
CPP Investments made its first investment in the company in 2012. The relationship deepened significantly in 2017 when Canadian Natural acquired a 70% stake in the Athabasca Oil Sands Project. That purchase dramatically improved Canadian Natural’s scale and cash flow profile, prompting CPP Investments to boost its investment by $1 billion.
“We saw a unique opportunity to back a Canadian company with a deeply differentiated asset base, reliable long-term production, and an owner-operator mindset,” said Benny Yeung, Managing Director, Active Equities at CPP Investments. “We had conviction that the market was undervaluing the sustainability of its cash flows and the strength of its leadership.”
That conviction paid off. Between 2018 and 2024, Canadian Natural delivered a total return of 183.7%, more than double the 84.3% return of the MSCI North America Energy Index over the same period (assuming dividend reinvestment). Free cash flow per share increased by 245%, translating to a 7-year compound annual growth rate of 19.4%.
Unique assets drive strong performance
Canadian Natural’s performance is anchored in its unique oil sands portfolio, which includes fully built-out projects with exceptionally long reserve lives of 33 years. That means it has decades of inventory left, compared to an average 12 years for competitors. At about 11%, it also has an extremely low corporate decline rate—a measure of how quickly production falls from existing operations and wells. Lower rates lead to more stable output and less need for ongoing capital reinvestment. As a result, the company can maintain or grow production without the costly reinvestment cycles its competitors face.
“Canadian Natural’s large, low-risk, high-value reserves, diversified, balanced asset base, flexible capital allocation strategy and effective, efficient operations make it truly unique,” Stauth said. “Our top tier assets, large reserves and low breakeven cost are catalysts that will continue to deliver strong shareholder value, providing optionality to maximize returns and drive material free cash-flow generation throughout all the commodity price cycles.”
Shared ownership, shared vision
In addition to asset quality, CPP Investments was drawn to how Canadian Natural’s approach aligns with shareholder priorities. Company leaders collectively hold a significant portion of the equity. That owner-operator mentality is reflected in management’s disciplined approach to capital deployment and its decision, in 2021, to formalize a policy of distributing more than 50% of free cash flow to shareholders through buybacks.
More recently, Canadian Natural updated that policy to return between 60% and 100% of free cash flow as share buybacks, depending on its progress in reducing net debt. The company defines free cash flow as adjusted funds flow, less capital and dividends, a nod to the role of its growing, sustainable dividend returns to shareholders. In fact, 2025 marks the 25th consecutive year of dividend increases—a remarkable run with a compound annual growth rate of 21%.
Canadian Natural also maintains deep, long-standing relationships with Indigenous communities in Canada. The company works with more than 120 Indigenous businesses annually and has invested over $1 billion in Indigenous procurement since 2012. It also supports a range of education, training, and community giving initiatives focused on long-term partnerships.
“Canadian Natural is a great example of the kind of company we look to back—strong assets, steady leadership, and a clear focus on the long term,” said Yeung. “Their commitment to smart reinvestment and keeping shareholders in mind really stands out.”
Climate Commitments and Innovation
CPP Investments believes long-term investors have a critical role to play in financing emissions reduction in the real economy. The organization treats climate-related risks and opportunities as vital financial considerations, integrating them throughout its investment and asset management processes.
With the view that the global economy will need all forms of energy during the evolution—including oil and gas—CPP Investments continues to invest across the energy spectrum, from renewables to conventional producers.
“Simple divestment of oil and gas is essentially a short on human ingenuity,” said John Graham, President & CEO of CPP Investments. “There are incredibly bright, talented scientists and engineers working in Canada to produce some of the most responsibly developed energy in the world.”
This belief underpins CPP Investments’ approach to energy investing: deploying patient capital into companies that are set up for success today and equipped to lead through the global transition. Rather than exclusively allocating capital to legacy products, the Fund backs operators that are advantageously situated to navigate the future.
This approach, in turn, has shaped CPP Investments’ long-standing partnership with Canadian Natural. The energy giant is a founding member of Canada’s Oil Sands Innovation Alliance and the Pathways Alliance, which aims to achieve net-zero emissions from oil sands operations by 2050. And Canadian Natural continues to invest in decarbonization technologies such as carbon capture, electrification, and process improvements, with the aim of reducing its emissions profile over time.
Why CPP Investments Backed Canadian Natural Resources
Long-life, low-decline assets: Oil sands operations with 33-year reserve life and minimal production decline.
Exceptional capital efficiency and strong margins: Enabling the company to remain profitable at lower WTI (West Texas Intermediate) oil prices, supporting resilient free cash flow generation
Shareholder alignment: High management ownership and a policy to return between 60% and 100% of free cash flow to shareholders, in addition to a growing dividend.
Resilient through cycles: Outperformed energy benchmarks over multiple periods while maintaining operational and financial flexibility.
Commitment to transition: Founding member of the Pathways Alliance; actively investing in emissions reduction technologies.
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