Alberta Wildfires Shut About 7% of Canada’s Oil Production

Wildfires in Canada’s energy heartland of Alberta have shut down almost 350,000 barrels of daily heavy crude production — about 7% of the country’s output — as a major blaze near the province’s eastern border menaces oil sands operations.

Cenovus Energy Inc., MEG Energy Corp. and Canadian Natural Resources Ltd. are among the companies that curtailed output because of the 61,500 hectare blaze near the Saskatchewan border. The so-called Caribou Lake Wildfire and other out-of-control blazes have grown to at least 10 hectares in size and were within roughly 10 kilometers of about 470,000 barrels a day of oil production early Monday.

Canada’s prairie provinces of Alberta, Saskatchewan and Manitoba have seen an eruption of wildfires, prompting the evacuations of thousands of people away from potential danger. A total of 26 wildfires were burning out of control Monday in Alberta, which is the source of most of Canada’s oil output.

The disrupted production — almost the equivalent of what OPEC+ nations agreed on Saturday to restore to the global market — is a reminder of how volatile oil supply can be. The loss of flows from the world’s fourth-largest oil producer comes at a time when heavy crude supplies already are strained. Oil sands operators had recently curtailed output for regular maintenance, and tightening sanctions have crimped supplies of similar heavy crudes from Venezuela.

Canada has long seen its energy output threatened by wildfires that rage through the dense forests of northern Alberta in spring and summer. In 2016, a blaze shut down the massive oil sands mines just north of Fort McMurray, taking more than 1 million barrels of daily production offline.

Cenovus said Sunday that it expects to resume operations at its 238,000 barrel-a-day Christina Lake oil sands site in the “near term” after shutting output on May 29. MEG Energy’s nearby oil sands site was affected by a power cut due to the blaze, delaying the restart of a 70,000 barrel-a-day section of the facility after maintenance. Canadian Natural evacuated workers from its Jackfish 1 oil sands site, shutting 36,500 barrels a day of output.

There will be a chance of showers Monday and Tuesday in the Edmonton area, according to Environment and Climate Change Canada. High temperatures will linger at around 19C (66F) both days.

Wednesday and Thursday will be clear and warmer, with highs reaching into the 20C range, the agency said. Showers will likely return by the weekend. On Monday, the highest fire threats are across central and southern Saskatchewan, as well as parts of eastern Alberta around Edmonton, according to Natural Resources Canada.

Photo: Wildfire smoke above Highway 97 near Trutch, British Columbia, on May 30. Photographer: Nasuna Stuart-Ulin/Bloomberg