Alberta forest fires affect several oilsands operations

Out-of-control forest fires in Alberta have prompted the closing of severalfacilities in the northern part of the province, and oilsands production is down more than 15 per cent overall as a result.

MEG Energy is the latest company to evacuate its operations as the company moved900 workers out of its Christina Lake site. About 80 employees remain at the plant and they can be flown out via the company's airstrip in an emergency.

The closure of MEG Energy's Christina Lake operation could represent a major problem for the company if the forest fires persist for a considerable amount of time.

Northern Alberta fires threaten

9 years ago

Duration 4:06

Conditions perfect for fires to start and spread and a third of them are currently out of control

Christina Lake is MEG's only source of oil production. Last year, it generated about 70,000 barrels a day. The company said current production is about 80,000 barrels a day.

"We are keeping in close contact with the government around the tracking and progress of the fires in the area," said MEG spokesmanBrad Bellows."We made this move as a precautionary measure."

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Meanwhile, Statoil Canada is removing some staff from its Leismer project south of Fort McMurray because thefires are about 15 kilometresaway.Canadian Natural Resources andCenovusfacilities are also affected by the fires.

Provincialofficials told CBC News Tuesday eveningthere are 70fires across Alberta, 19of which areburning out of control. They saida fire northwest of Cold Lake, near the affected oilsands operations,is "of concern." A government update on Tuesday evening described the fire as about17,500 hectares in size.

The fires are not only affecting the oil industry, but could hurt the country's economy. Oilsands shutdowns could meana0.1-0.3 per centhit to second-quarterannualizedGDP, according to aBank of America Merrill Lynch Global Researchreport. Analysts suggest the fires will likely have much more of an impact than if plants were closing for routine maintenance.

"We don't know what these wildfires will mean in terms of pipelines will there be impacts to broader industries, there might be impacts on infrastructure and so on," saidEmanuella Enenajor, senior Canada and U.S. economist withBank of AmericaMerrill Lynch."So, I think the risk is greater here because we don't know the full impact of the blaze."

Cenovus evacuated its facilities at Foster Creek because fire threatened the only road out. Approximately 1,800 staff were removed. The facility produces 135,000 barrels a day.

Elsewhere, the companyactivateditsemergency response plan at its Narrows Lakeproject, located about 150 kilometres south of Fort McMurray. The oilsands project is currently under construction. Cenovus also shut down itsBirch Mountain natural gas plant and used a helicopter to transport two workers from the facility as a fire burned 10 kilometresaway. The plant is near Fort McKay, about 100 kilometresnorth of Fort McMurray.

Canadian Natural Resources has two operations closer to the fires. ThePrimrose facility is shut-in, cutting 80,000 barrels perday of oil production. The Kirby South plants are still producing oil, but production is down 18,000 barrels a day to 12,000.

While workers are removed from some of the plants, there is little danger of the facilities burning to the ground, sincethey are built farfrom the tree lines.

"This shows that production is important to our industry, but safety is paramount," saidChelsieKlassen, spokeswoman forthe Canadian Association of Petroleum Producers (CAPP).

Other companies such as Devon and Imperial Oil are keeping a close eye on the situation.

"We have a team actively monitoring the situation and have regular communication with Sustainable Resource Development on the status of the wildfires in the area," said Devon spokeswoman Nadine Barber.