Shifting fires across Canada’s main energy-producing province are prompting drillers to throttle back production once again — more than a week after the blazes began — and officials are warning of worsening conditions ahead.
(Bloomberg) — Shifting fires across Canada’s main energy-producing province are prompting drillers to throttle back production once again — more than a week after the blazes began — and officials are warning of worsening conditions ahead.
Athabasca Oil Corp. joined Chevron Corp., Crescent Point Energy Corp. and others in reporting renewed shutdowns in Alberta due to the fires. Industry consultant Rystad Energy estimates natural gas curtailments have reached the equivalent of about 250,000 barrels of oil output a day.
While the total number of active wildfires in Alberta declined to 86 on Tuesday afternoon, down from 90 a day earlier, the number of out-of-control blazes ticked up by one to 24. Smoke from the fires drifted to Calgary, where most of Canada’s energy producers are based, shrouding the city in smog.
While that smoke has in some cases helped firefighters battle the blazes by cooling temperatures at the ground, the conditions that helped spawn the fires remain a threat, and no significant rain is expected in the coming days, said Christie Tucker, a spokeswoman for Alberta Wildfire.
“The wildfire landscape is still changing as we see some wildfires contained and others starting up,” Tucker said.
Almost 19,500 residents are currently evacuated, said Colin Blair, executive director of the Alberta Emergency Management Agency. That’s up from 17,000 on Monday.
In 2016, wildfires ripped through Alberta’s oil sands region, cutting more than 1 million barrels of daily crude production and destroying whole sections of Fort McMurray, the biggest city in the area. This month’s blazes have largely spared the oil sands.
Operational Updates
Below is a summary of operational updates from companies working in the area:
- Athabasca shut down two facilities in its light-oil division at Kaybob, with the equivalent of about 2,300 barrels of daily output curtailed.
- Obsidian Energy Ltd. shut down production from fields at Seal, Walrus and Nampa in the Peace River area on May 12 and the Peace River Harmon Valley South field on May 14. The company restored 2,500 barrels of daily production in Pembina, while 8,500 barrels remains offline. A total of 9,700 barrels of output is currently curtailed.
- Chevron’s production at the Duvernay formation near Fox Creek, Alberta, has been shut in. Last year, the major’s net oil equivalent production was 40,000 barrels per day, and net crude oil production was 11,000 barrels per day.
- Crescent Point is shutting in the remainder of its 45,000 barrels of oil equivalent a day of Kaybob Duvernay production due to the fires. No damage to its assets has been reported.
- Kiwetinohk Energy Corp. said a fire to the north of its Simonette operations is out of control, and it has halted operations, secured plants and removed staff. About 18,000-20,000 barrels of oil equivalent a day of output is affected, but there’s been no damage to infrastructure. Meanwhile, Kiwetinohk has restored two-thirds of output at its Placid site after third-party infrastructure resumed service.
- Baytex Energy Corp. shut around 20,000 barrels of oil equivalent a day of production starting May 13 as fires hamper operations in the Peace River and Peavine regions. Also, about 4,000 barrels of oil equivalent per day remains shut since May 5 due to third-party infrastructure constrictions.
(Updates with new outage in second paragraph)
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