(Bloomberg) – A flareup of wildfires in Alberta is threatening as much as half a million bpd of oil sands production, with MEG Energy Corp becoming the latest company to evacuate workers.
About 500,000 bpd of marketable oil sands production could be within 10 km (6.2 miles) of an out-of-control blaze, Rystad Energy said in a report Thursday. That’s equal to roughly 10% of the total oil production in the province. As much as 1.2 MMbpd could be within 20 km, Rystad Energy said.
A total of 133 wildfires were burning in the province that holds the world’s third-largest crude reserves, with 52 categorized as out of control amid hot, dry weather. The fires helped push higher the premium for U.S. benchmark West Texas Intermediate’s front-month futures over the next contract, a key U.S. crude spread that gauges short-term market tightness.
MEG Energy began evacuating non-essential workers from its Christina Lake oil sands site, which produced almost 100,000 bpd crude in May, according to Alberta Energy Regulator data. Production had not been curtailed as of early Thursday.
Wildfires have already affected oil sands output with Suncor Energy Inc. curtailing production from its Firebag facility, which produced about 231,000 bpd in May. Greenfire Resources Ltd. also curtailed output from its two oil sands facilities last weekend but was restoring the production by Monday. Like MEG, Imperial Oil Ltd. started evacuating non-essential workers from its Kearl oil sands mine, which is west of the same fire affecting Suncor.
Fires are also affecting gas production in the western part of the province, with blazes within 10 km of t 26,000 boed. Tourmaline Oil Corp., Canada’s biggest gas producer, had about 2,620 boed near a fire. Production wasn’t affected, the company said in an email.
Peyto Exploration and Development Corp., another gas producer, sees “no material impacts” from forest fires but continues to monitor the situation, the company said in an email.
Lead image (Credit: Reuters)
