Wildfire spreads closer to Canada’s oil sands: hundreds evacuated

Wildfire spreads closer to Canada’s oil sands: hundreds evacuated

Image provided by the Government of Alberta.

Canadian firefighters are trying to control a massive wildfire in northern Alberta, which has spread into the oil sands area, threatening several operations and keeping about 10% of production offline.

As of Wednesday night, there were 63 fires burning in Alberta and 13 were considered to be out of control. They have prompted the shutdown of about 230,000 barrels a day of oil sands output.

Statoil ASA (NYSE:STO), MEG Energy Corp (TSE:MEG), Cenovus Energy (NYSE, TSE:CVE) and Canadian Natural Resources (TSE:CNQ) have momentarily closed plants and evacuated hundreds of workers in the last two days.

Cenovus shut its 135,000-barrel-a-day Foster Creek operations, located near Cold Lake, on Saturday. The company said fires were about 19 km from its Foster Creek oil sands facility and only 1.5 km away from its Caribou South natural gas plant.

Canadian Natural’s 80,000-barrel-a-day Primrose facility remained down Wednesday after halting operations over the weekend, Bloomberg reports. As a consequence, output from the company’s Kirby South has been reduced by 18,000 barrels a day.

The provincial government said in its latest update all evacuation orders have been lifted.

"People who were previously under a mandatory evacuation order are in the process of returning to their homes," it said.

However, authorities expect hot, dry conditions to continue at least through the end of the week.

"In the last 24 hours there have been 33 new wildfires," the provincial government said in its latest update. "The wildfire outlook in Alberta continues to be severe."

Canada is the world’s fifth-largest oil supplier and most this crude from the oil sands reserves of northern Alberta. The country is forecast to produce 2.3 million barrels a day from the sands this year, according to the Canadian Association of Petroleum Producers.