XOM Exxon Mobil Corp

By Chester Dawson 

CALGARY, Alberta -- The threat from forest fires in northern Alberta receded further on Thursday with the blazes moving away from oil-sands production facilities and a nearby evacuated town as cooler, wetter weather aided firefighting efforts, provincial officials said.

The out-of-control wildfire spread to more than 1.25 million acres, up from just over one million acres on Wednesday, but the front line moved away from critical infrastructure to a remote area on the border of neighboring Saskatchewan province, the officials said.

Firefighters kept blazes away from two major oil-sands production complexes threatened earlier in the week, helped by lower temperatures and trace amounts of rain, said Chad Morrison, the Alberta forest ministry's chief wildfire official.

"The threat definitely has diminished around the communities and the oil-sands facilities," Mr. Morrison said at a news conference in Edmonton. "We held the fire yesterday in all critical areas."

No production facilities have been damaged by wildfires, but the threat has forced several large oil sands producers to shut down mining and well sites for more than two weeks, reducing Canadian oil production by at least one million barrels a day, or about 40% of the country's total oil-sands output. The spread of fires forced some operators to abandon plans laid last week to restart.

But late Thursday, Exxon Mobil Corp.'s Canadian unit Imperial Oil Ltd. said it had partially restarted operations at its Kearl oil sands mine about 47 miles northeast of Fort McMurray. Imperial Oil, which shut down the mine 10 days ago, did not provide a timeline for resuming full operations at the facility, with a capacity of 194,000 barrels a day.

Mandatory evacuation orders remain for Fort McMurray along with 19 work camps and smaller communities in the area due mostly to air-quality concerns and damage to key infrastructure, Alberta's municipal affairs minister, Danielle Larivee, told reporters.

The government said Wednesday that the more than 80,000 residents evacuated from Fort McMurray earlier this month will be allowed to return in stages starting June 1. No timeline has been established for some 8,000 others evacuated from work camps.

Firefighters held the blaze to the perimeter of oil-sands mining and processing facilities operated by Suncor Energy Inc. and its Syncrude unit, burning some vegetation around the edges but not damaging any equipment, officials said.

Suncor has closed down production of 300,000 barrels of oil a day at two mines and a pair of oil-sands well sites, and its Syncrude unit has shut its 350,000-barrel-a-day-capacity mines. The Suncor and Syncrude facilities nearest to the fires are about 4 miles from one another, separated by a barren stretch of reclaimed land and man-made ponds filled with waste materials from the mines.

While not damaged, these and other oil-sands sites have been affected by staffing issues stemming from the evacuation of Fort McMurray's residents and logistics issues preventing them from shipping heavy crude. Pipeline operator Enbridge Inc. has reduced its oil-sands crude shipments by about 900,000 barrels a day, down from a capacity of 1.5 million barrels a day.

Write to Chester Dawson at chester.dawson@wsj.com

(END) Dow Jones Newswires

May 19, 2016 19:44 ET (23:44 GMT)

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