Canada’s oil output spared fire damage to rebound

Canada oil-sands producers, including Suncor Energy, could resume production within a week after the threat subsides from wildfires that cut as much as 40% of the region’s output.

A quick restart depends on whether companies managed shutdowns properly and if power and pipeline infrastructure is unscathed, according to analysts at Wood Mackenzie and IHS Energy.

Suncor and Syncrude Canada, two of the biggest producers in the area that’s been ravaged by wildfires near Fort McMurray, Alberta, both said they managed safe shutdowns. Only one oil-sands site, Cnooc’s Nexen operations, suffered minor damage.

“The best possible case, you’re probably looking at somewhere within a week to get them restarted,” said Harold York, vice president of integrated energy at Wood MacKenzie. 

Restarts will also depend on availability of workers after large-scale evacuations, which may be hindered given destruction of homes in the area, he said.

If companies executed controlled shutdowns, that means bitumen has been cleared from the system so that restarts won’t be hindered, according to Kevin Birn, a director at IHS Energy in Calgary.

The bulk of Canada’s large oil-sands projects shut some or all output in recent days, cutting supplies by about one million barrels a day, according to an IHS Energy estimate.

Energy companies evacuated workers and shut upgraders, mines, and wells as the inferno grew to twice the size of New York City.

Bloomberg


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