Alberta’S Wildfires Disrupt 350,000 Barrels Of Daily Crude Production

Alberta’s wildfires have led to the suspension of approximately 350,000 barrels per day (bpd) of heavy crude production, which constitutes around 7% of Canada’s total oil output.

The Caribou Lake Wildfire, along with other uncontained fires, poses a significant threat to oil sands operations in the region.

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The wildfire, which has spread across 61,500 hectares (ha) near the Saskatchewan border, has forced companies such as Cenovus Energy, MEG Energy and Canadian Natural Resources to curtail their operations.

As of early Monday, the fires had grown to at least 10ha in size and were within approximately 10km of oil production facilities that collectively produce around 470,000bpd.

Alberta, along with the prairie provinces of Saskatchewan and Manitoba, has experienced a surge in wildfires, leading to the evacuation of thousands of residents.

On Monday, 26 wildfires were reported to be burning uncontrollably in Alberta, a significant contributor to Canada’s oil production.

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The interruption in production is especially notable given its similarity to the volume that OPEC+ nations agreed to restore to the global market.

This disruption underscores the unpredictable nature of oil supply, particularly at a time when heavy crude supplies are already tight.

Oil sands operators had recently reduced output for routine maintenance, and sanctions have further restricted the availability of heavy crudes from countries like Venezuela.

A notable incident occurred in 2016 when a wildfire halted operations at oil sands mines north of Fort McMurray, cutting daily production by more than one million barrels.

Cenovus Energy announced on Sunday that it expects to resume operations at its Christina Lake oil sands site, which has a capacity of 238,000bpd, in the “near term” following a shutdown that began on 29 May.

Similarly, MEG Energy experienced a power outage at its oil sands facility, with maintenance delaying the restart of a section capable of producing 70,000bpd.

Canadian Natural Resources has also taken action by evacuating workers from its Jackfish 1 oil sands site, resulting in the cessation of 36,500bpd of production.

The region is hopeful for the return of showers by the weekend, which could help contain the wildfires.