47 new wildfires erupt in 24 hours across Canada’s oil sands patch in threat to production

(Bloomberg) – Hot and dry weather is spawning dozens of new wildfires across Alberta, with blazes threatening more than 400,000 bpd of Canada’s oil sands production.

In the past 24 hours, 47 new fires emerged in the province, most of them south of the unofficial oil sands capital of Fort McMurray, said Kai Bowering, spokeswoman for Alberta Wildfire. The arid conditions are expected to persist for the next 24 hours, making it easier for the blazes to spread, she said.

Wildfires in Alberta this year have reduced production from the oil sands — the world’s third-largest crude reserves — and forced a partial evacuation of Fort McMurray in May. A new bout of hot weather has inflamed fire activity in recent weeks, with more than 50 out-of-control blazes burning in Alberta currently and more than 10% of the province’s oil production under threat.

One 3-hectare (7-acre) fire is within about 10 km (6.2 miles) of MEG Energy Corp.’s Christina Lake site, which produced almost 100,000 bpd in May, according to Alberta Energy Regulator data.

Another blaze is within 10 km of a section of Imperial Oil Ltd.’s Cold Lake operation that produces 19,000 bpd, and a third is close to Canadian Natural Resources Ltd.’s Kirby oil sands. Emails to all three companies weren’t immediately returned.

The fires helped boost Canadian heavy crude prices. Western Canadian Select’s discount to benchmark West Texas Intermediate narrowed to $13.10 a barrel on Wednesday from $14 a barrel on Tuesday, according to a person familiar with prices.

Suncor Energy Inc. curtailed production from its Firebag site two weeks ago, reducing output from a facility that produced about 231,000 bpd in May. The same blaze prompted Cenovus Energy Inc. to demobilize some workers from its Sunrise oil sands site and Imperial Oil to begin removing non-essential workers from its Kearl oil sands mine.

Temperatures as high as 32C (90F) Wednesday, low relative humidity and winds gusting up to 30 kilometers an hour in northeastern Alberta may contribute to “extreme fire behavior” lasting for the next few days, Alberta Wildfire said in an update.

The fire affecting Suncor, Cenovus and Imperial has moved closer to the production sites in recent days, as has an out-of-control wildfire about 9 km to the south. Fires southwest of Fort McMurray have also affected production. Greenfire Resources Ltd. last weekend temporarily curtailed output from its Hangingstone sites, which produces about 23,000 bpd.