Canadian oil production trickles back as wildfire threat eases | Reuters

EDMONTON/LAC LA BICHE, Alberta Oil sands companies around the Canadian energy centre of Fort McMurray began to restart their operations on Tuesday after an out-of-control wildfire forced a week-long shutdown, and the province's top official said she expected production to ramp up over the coming weeks.

Reuters May 11, 2016 03:00:16 IST
Canadian oil production trickles back as wildfire threat eases
| Reuters

Canadian oil production trickles back as wildfire threat eases
 Reuters

EDMONTON/LAC LA BICHE, Alberta Oil sands companies around the Canadian energy centre of Fort McMurray began to restart their operations on Tuesday after an out-of-control wildfire forced a week-long shutdown, and the province's top official said she expected production to ramp up over the coming weeks.

The fire continued to grow on Tuesday, but it has moved far enough away from the oil sands' sites to allow companies to begin resuming production.

Royal Dutch Shell Plc (RDSa.L) became the first company to resume its operation in the centre of Canada's oil sands region. Enbridge Inc (ENB.TO) began inspecting its facilities and prepared to restart operations shuttered during the blaze.

"While thousands of lives will never be the same, we can take small steps to getting back the rhythm of northeast Alberta," Alberta Premier Rachel Notley told reporters after meeting with executives from companies including Suncor Energy Inc (SU.TO), ConocoPhillips Canada (COP.N) and the Canadian Association of Petroleum Producers.

"For many in Fort McMurray, that means rolling up the sleeves, and returning to work doing what they love, which is working in the energy sector," she said in Edmonton.

The meeting came a day after Notley led an inspection tour of Fort McMurray, which found that the town was less damaged than initially feared with about 90 percent of its buildings surviving the blaze.

But its 88,000 residents, who were hurriedly evacuated last week as flames attacked the town, will not be able to return for weeks from temporary accommodation in the provincial capital Edmonton, 380 km (235 miles) south, and elsewhere.

"These are difficult circumstances," said Al Monaco, Enbridge CEO, in a statement. "We have a well-trained and experienced team that has developed a detailed logistical plan to enable the safe restart of our pipelines and terminals."

Energy industry officials grappled with transportation problems for staff because the specialists who run the oil production sites were also among the residents displaced by the blaze.

Shell said it will fly staff in and out of the region, while Imperial Oil Ltd (IMO.TO) said its Kearl oil sands mining project will remain shut until the company worked out the logistics of moving people and materials to and from the remote site.

Syncrude restarted power generation at its oil sands mine in Aurora, about 80 km (50 miles) north of Fort McMurray, as it began planning to resume operations, a spokeswoman said.

TOWN STILL SMOLDERING

The blaze grew moderately on Tuesday to 229,000 hectares (560,000 acres) and spread east through terrain with no communities. It merged with another fire burning near Campbell Lake, some 50 km (30 miles) east of Fort McMurray. The closest oil projects to Fort McMurray are about 20 km (12 miles) north of the town and not in the fire's current path.

The inspection of Fort McMurray revealed blocks of homes reduced to blackened foundations, front steps and metal barbecues. Notley said 2,400 structures had burnt within the city while almost 25,000 were saved.

Officials warned it was not safe for residents to return to the town, with parts still smoldering and large areas without power, water and gas. Notley said repair crews will need weeks to make the city safe.

Prime Minister Justin Trudeau told the House of Commons he would go to Fort McMurray on Friday. Canada's labour minister told reporters on Tuesday that the federal government would ensure that people put out of work by the blaze receive unemployment payments.

About half of Canada's crude output, or 1 million barrels per day, was taken offline by the blaze, according to a Reuters estimate.

Canadian crude prices slipped on Tuesday, trading below the U.S. crude benchmark, as signs of resuming production eased supply concerns.

Nearly all of Fort McMurray's residents escaped the fire safely, although two teenagers died in a car crash during the evacuation.

(Additional reporting by Ethan Lou and Allison Martell in Toronto and David Ljunggren in Ottawa; Writing by Scott Malone and Jeffrey Hodgson; Editing by Jeffrey Benkoe and Cynthia Osterman)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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