Resurgent wildfires in Canada’s main energy-producing region are increasing the risks to the country’s vast oil-sands production after forcing drillers on the other side of the province to curb output on a smaller scale in recent weeks.
(Bloomberg) — Resurgent wildfires in Canada’s main energy-producing region are increasing the risks to the country’s vast oil-sands production after forcing drillers on the other side of the province to curb output on a smaller scale in recent weeks.
Almost 2.7 million barrels of daily oil-sands production in northeastern Alberta is now in “very high” or “extreme” wildfire danger zones, according to industry consultant Rystad Energy. The equivalent of at least 240,000 barrels — and possibly more than 300,000 barrels — of daily oil output already is shut down, the firm estimated, primarily in the western portion of the province.
The total number of active wildfires in Alberta rose to 92 on Wednesday morning from 86 on Tuesday afternoon. The number of out-of-control blazes jumped to 27 from 24 the day before. Athabasca Oil Corp. on Tuesday joined Chevron Corp., Crescent Point Energy Corp. and others in reporting renewed shutdowns in Alberta.
Smoke from the fires has blown hundreds of miles south to Calgary, where most of Canada’s major energy producers are based, shrouding the city. While that smoke has in some cases helped firefighters battle the blazes by cooling temperatures at the ground, the conditions that helped spawn the fires remain a threat, and no significant rain is expected in the coming days, Christie Tucker, a spokeswoman for Alberta Wildfire said in an update Tuesday.
“The wildfire landscape is still changing as we see some wildfires contained and others starting up,” Tucker said.
Almost 19,500 residents were evacuated, said Colin Blair, executive director of the Alberta Emergency Management Agency. That’s up from 17,000 on Monday.
In 2016, wildfires ripped through Alberta’s oil sands region, cutting more than 1 million barrels of daily crude production and destroying whole sections of Fort McMurray, the biggest city in the area.
Operational Updates
Below is a summary of operational updates from companies working in the area:
- Athabasca shut down two facilities in its light-oil division at Kaybob, with the equivalent of about 2,300 barrels of daily output curtailed.
- Obsidian Energy Ltd. shut down production from fields at Seal, Walrus and Nampa in the Peace River area on May 12 and the Peace River Harmon Valley South field on May 14. The company restored 2,500 barrels of daily production in Pembina, while 8,500 barrels remains offline. A total of 9,700 barrels of output is currently curtailed.
- Chevron’s production at the Duvernay formation near Fox Creek, Alberta, has been shut in. Last year, the major’s net oil equivalent production was 40,000 barrels per day, and net crude oil production was 11,000 barrels per day.
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