Canada Oil Sands Operators to Resume Production in 'Coming Days and Weeks' Canada Oil Sands Operators to Resume Production in...
May 11 2016 - 1:50AM
Dow Jones News
Alberta Premier Rachel Notley said she expects oil-sands
companies that suspended output of crude oil by up to one million
barrels a day due to wildfires that ravaged the Fort McMurray area
to resume production "in the coming days and weeks."
Ms. Notley made the comments after meeting with energy
executives Tuesday and discussing the steps that need to be taken
for production to be resumed, including ensuring that
infrastructure such as pipelines and electricity is operational,
and that there is housing and medical care for workers.
Cooler temperatures and firefighter relief efforts have helped
slow the spread of the Alberta wildfires, but production remains
affected due to staff evacuations and logistical hurdles such as
pipeline outages.
Royal Dutch Shell PLC's Canadian unit said Tuesday that it was
able to restart production at its Albian mine, which it suspended
on May 3, marking the first major producer to resume operations
since the fire. The company said it would rely on fly-in, fly-out
staff to operate the mine. Shell's oil sands production capacity is
255,000 barrels a day.
The decline in output reached at least 839,000 barrels per day,
or close to one-third of Canada's overall daily production, before
Shell said it had restarted Albian.
There was no damage to oil sands facilities north of Fort
McMurray, Ms. Notley said. Companies have said they cut or halted
production to evacuate workers as a precaution and to cope with
supply disruptions or smoke that interfered with operations.
Steve Williams, the chief executive of Suncor, said his "primary
focus is to work with our pipeline companies and our power
companies" to make sure the infrastructure is intact.
The statements from Ms. Notley, Mr. Williams and other industry
leaders at a press conference Tuesday were the first effort to put
forward a timeline for resuming operations of affected companies.
On Monday, Ms. Notley toured the Fort McMurray area to assess the
damage from what she described as an "ocean of fire" that
surrounded the area.
While around 2,400 homes and buildings were destroyed by the
fires, about 90% of buildings in Fort McMurray, including schools
and a hospital, remain intact, officials said Monday.
The loss of oil-sands output, a key engine of the Canadian
economy is expected to dampen the country's economic growth in the
second quarter, and worsen a downturn from low oil prices that
already has led to large job cuts and lost production.
While the discussion Tuesday focused on the timing of resuming
operations, they came after Imperial Oil Ltd., Exxon Mobil Corp.'s
Canadian unit, said late Monday that it completed a controlled
shutdown of its Kearl oil-sands mine, which produces around 194,000
barrels a day and is about 40 miles north of the town of Fort
McMurray, hub of the oil sands.
Canadian Prime Minister Justin Trudeau is expected to visit Fort
McMurray on Friday to assess the fire's damage and meet with local
leaders, he said during a parliamentary debate on Tuesday.
The fires continue to move eastward from Fort McMurray, but
growth appears to be slowing as cooler temperatures, lighter winds
and some rain helped slow the spread, said Chad Morrison, Alberta's
manager of wildfire prevention in a phone interview.
The fires, however, are now estimated to cover close to 570,000
acres and is nearly 10 miles from the province's border with
Saskatchewan, he added.
"It's slowing down a lot because we've had a bit of change in
weather but also, our firefighters have had a chance to anchor
themselves and dig in," Mr. Morrison said. "They're really starting
to chase this [fire] down."
There are more than 700 firefighters battling blazes in and
around Fort McMurray, along with 20 helicopters and 15 air tankers,
provincial officials said.
Write to Elena Cherney at elena.cherney@wsj.com and David
George-Cosh at david.george-cosh@wsj.com
(END) Dow Jones Newswires
May 11, 2016 01:35 ET (05:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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