Canadian Natural shuts more output as Alberta fire rages
ROBERT TUTTLE
CALGARY, Alberta (Bloomberg) -- Canadian Natural Resources Ltd. reduced production from its Kirby South oil-sands operation in Alberta, raising the amount of production brought offline because of a nearby forest fire to the 233,000 bpd facility.
The out-of-control fire near Lac La Biche was discovered on Saturday and covered 8,200 hectares, Alberta’s Environment and Sustainable Resource Development agency said on its website.
Crude output was cut by 18,000 bpd to 12,000 at the site, said Julie Woo, a company spokeswoman. Canadian Natural yesterday said 80,000 bpd of production was shut at its Primrose facility, and Cenovus Energy Inc. closed its 135,000 bpd Foster Creek operations on the Cold Lake Air Weapons Range in northeastern Alberta.
The production affected by the blaze amounts to about 10% of the country’s total oil-sands output at a time when the discount for heavy Canadian crude relative to the U.S. benchmark has stayed below $10 for all of May, the longest streak in five years.
Canadian crude prices “might strengthen a little bit,” said Bart Malek, analyst at TD Securities in Toronto. “It tightens supply up.”
Heavy Western Canadian Select traded at an average discount of $8.66/bbl to West Texas Intermediate this month, the smallest since 2010, data compiled by Bloomberg show. The grade traded at $9.75 below WTI on Friday.
Canadian Natural evacuated personnel from its Primrose operations on Saturday. Also on Saturday, Cenovus evacuated 1,700 staff members from its Foster Creek site and also shut 20 MMcfgd production, most used to fuel its Foster Creek operation.
Canada, the world’s fifth-largest crude supplier, produces most of its oil from the oil sands reserves of Northern Alberta. The country will produce about 2.3 MMbopd from the oil sands this year, according to the Canadian Association of Petroleum Producers.
The Cold Lake fire has claimed the life of a pilot that was fighting the blaze, according to the Alberta agency.
