Energy Business

Canada Wildfire Shutting Down Oil Sands Operations

One of the largest mining operations in Canada’s oil sands region, Syncrude, said on Saturday that it is shutting down its mine and processing plant north of Fort McMurray, Alberta. The company also said that it is evacuating all employees due to smoke at the site.

The company said that there is no immediate threat to any of its facilities from the wildfire that has engulfed hundreds of square miles and destroyed at least 1,600 structures in Fort McMurray and the surrounding area.

Husky Energy on Saturday also shut down its joint venture with BP plc (NYSE: BP). The in situ project had already cut production from 30,000 barrels a day to 10,000 barrels. There has been no damage to the facilities and some staff have remained on site. The Sunrise project is located about 35 miles northeast of Fort McMurray and is, so far at least, out of the main path of the fire.

Exxon Mobil Corp.’s (NYSE: XOM) Imperial Oil Ltd. subsidiary is a partner along with Suncor Inc. (NYSE: SU) and others in the massive Syncrude project which produces about 350,000 barrels a day of light synthetic crude.

Nearly a 1 million barrels a day of production had already been shut down before the two Saturday closures. Suncor had already stopped production at two projects due to pipeline shutdowns, taking nearly 236,000 barrels a day out of production.

Imperial reduced its staff and slowed production at its Kearl project located about 70 miles north of Fort McMurray. The facility had been producing about 194,000 barrels a day.

Cenovus Energy Inc. (NYSE: CVE), which operates a facility about 100 miles south of Fort McMurray, has evacuated non-essential staff but continues to operate at capacity.

A storage terminal owned by Enbridge Inc. (NYSE: ENB) with a capacity of 2.3 million barrels has been closed and operations have been cut back at another that has capacity to store 3 million barrels.

As we noted yesterday, oil sands facilities near Fort McMurray have not been damaged by the fire. The evacuation of more than 88,000 residents has forced the closure of many operations.