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Charles Kennedy

Charles Kennedy

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Alberta Wildfires Threaten Canada’s Oil Sands Production

  • Wildfires in Canada flared up this week amid rising temperatures.
  • Early last week, the wildfires in Canada resulted in the shut-in of 319,000 barrels of oil equivalent per day.
  • Wildfires are now threatening more oil sands output.

Following a brief respite at the end of last week, the wildfires in Alberta began raging again this week as temperatures rose, threatening the oil sands operations in the province and forcing operators to shut in oil and gas production.  

Early last week, the wildfires in Canada resulted in the shut-in of 319,000 barrels of oil equivalent per day (boepd) from the country’s oil and natural gas production or 3.7% of all output.

In the middle of last week, major oil and gas operators in Canada’s energy-producing province of Alberta restarted part of the production and processing facilities that were shut during the prior weekend.

Most of those shut-ins and subsequent resumption of production concerned gas output, but as the situation with wildfires in Northern Alberta deteriorated this week, it now threatens more oil sands output.

Rystad Energy has warned that nearly 2.7 million barrels per day of Alberta oil sands production is in “very high” or “extreme” wildfire danger rating zones in the month of May.

This week, Chevron Canada demobilized activities and shut in all Kaybob Duvernay production late on Tuesday as the wildfire situation in Northern Alberta evolved rapidly due to changing weather conditions. 

ConocoPhillips, which had removed non-essential workers from its Surmont oil sands site on Tuesday due to a wildfire nearby, is now returning those workers, the company said in an email to Bloomberg.

Athabasca Oil Corporation has shut in two of its facilities within its light oil operations at Kaybob.

Obsidian Energy took the Peace River area fields at Seal, Walrus, and Nampa offline on May 12 and shut in the Peace River Harmon Valley South field on May 14 as a precautionary measure. As of May 16, approximately 9,700 boepd of Obsidian’s production was curtailed across Peace River and Pembina due to wildfires.

Whitecap Resources Inc on Wednesday said that approximately 26,000 boepd of its production is shut-in, and over the last two weeks, this has fluctuated between 12,000 boepd and 40,000 boepd shut-in at any given time.  


By Charles Kennedy for Oilprice.com

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