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Alberta wildfires prompt oil firms to suspend production and evacuate staff
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Several energy companies have suspended oil operations and evacuated non-essential staff from northeastern Alberta as nearly 20 wildfires rage out of control in the remote rural region.
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At least 233,000 barrels per day of oil sands production, 9% of Alberta’s total oil sands output, has been suspended in Alberta’s northeast because of the fire risk.
Several small towns threatened by fires have been evacuated in other parts of the province.
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In its daily update on Tuesday, the Alberta government said there are 66 forest fires now burning in the province and 19 of those, including the one in the Cold Lake oil sands region of northeastern Alberta, are considered out of control.
MEG Energy Inc said on Tuesday it was suspending operations at its 80,000-barrel-per-day Christina Lake oil sands project and evacuated non-essential staff.
The company said in a statement that there was as yet no safety risk from the forest fires, but it has halted work on a planned maintenance shutdown at its project site, making it the latest of several oil producers in the region to move staff away from the potential danger.
“As a precautionary measure, we have temporarily suspended operations, including our planned maintenance turnaround,” the company said in a statement. “As soon as we have safety clearance regarding fire hazards, we will resume normal operations.”
Bank of America Merrill Lynch warned in a research report that the decreased production from the fires could affect economic growth.
“If wildfire disruptions persist through the rest of May, and activity gradually picks up in June, we estimate a 0.1% to 0.3% hit to [second-quarter] annualized GDP growth,” Emanuella Enenajor, the bank’s Canada and US economist wrote. But she warned that the estimate was uncertain and the impact would depend on how long it took to return production to normal levels.
Over the weekend, Cenovus Energy Inc and Canadian Natural Resources Ltd evacuated staff and halted output at two sites as a precaution against the rapidly spreading forest fire.
On Monday, Canadian Natural said it also cut production at its nearby Kirby South thermal project to 12,000 barrels per day from around 30,000.
Husky Energy Inc said its operations in the Cold Lake oil sands region have not been affected by the blaze, though it has suspended operations at its Muskwa natural-gas processing plant and its Overlea compressor facilities in north central Alberta due to other fires. Six employees were evacuated from the sites.
