SaskOil was established in 1973 by the government of Saskatchewan to facilitate direct government investment in exploration and development in Saskatchewan's oil and gas industry. The creation of SaskOil was partly encouraged by the rapid increases in the price of oil in 1973. The Saskatchewan government also wanted a window on the industry to increase its knowledge of the oil and gas industry production economics. The company grew rapidly in the 1970s through significant government investment in acquisition of existing companies and exploration. By 1976, SaskOil was reported to be producing 6% of Saskatchewan oil production. As the company grew, it acquired production and land positions not just in Saskatchewan but in other parts of western Canada. Besides exploration and development of petroleum, SaskOil also established a research and development branch to develop petroleum technologies; in 1986, the research and development branch of SaskOil was transferred to the Saskatchewan Research Council.
The majority of SaskOil was sold to private shareholders in 1986. In 1996, SaskOil was renamed Wascana Energy. The Saskatchewan government's remaining interest was sold when Canadian Occidental Petroleum acquired Wascana Energy in 1997. At the time of the sale, Wascana Energy was producing about 70,000 barrels of oil equivalent/day from holdings across western Canada. Canadian Occidental Petroleum merged its other Canadian oil and gas production assets with Wascana Energy to create a new Canadian division under the same corporate name, Wascana Energy. The new Wascana Energy had production of about 100,000 barrels of oil equivalent/day in 1997. In 2000, Canadian Occidental Petroleum was renamed Nexen following a buy-out of the interest of the U.S.-based Occidental Petroleum. In 2001, Wascana Energy, controlled by Nexen, was renamed Nexen Canada.