Drillers suspend natural gas production after weekend wildfire resurgence in Canada

Sheela Tobben and Natalie Obiko Pearson, Bloomberg May 15, 2023

(Bloomberg) – A resurgence of wildfires across Canada’s main energy producing province in recent days has prompted at least one driller to suspend some of its production again.

Pipestone Energy Corp. temporarily halted roughly 20,000 boed of output since Friday after blazes resurfaced close to some processing facilities the company relies on. It had restarted assets that were shut in response to a wave of fires in early May.

There were 90 active wildfires in Alberta as of Monday morning, with 23 considered out of control. That compares with 87 active fires and 24 out of control on Sunday.

“The fire danger is extreme,” Josee St-Onge, spokeswoman for Wildfire Alberta, said at a news conference Sunday. “Our peak burning period — which is when the temperatures are at their highest and the fuels are at their driest — is still in front of us.”

Extreme heat warnings were in effect across much of the province. Temperatures in Manning, a town in the province’s north, surged to 30.9C (87F) on Sunday — some 14 degrees above normal for this time of the year, according to data from Environment Canada.

“Hot and dry conditions throughout much of Alberta present an ever increasing risk of new wildfires starting and the potential for current wildfires to grow quickly,” said Colin Blair, executive director of the Alberta Emergency Management Agency.

Crude inventories across monitored sites in western Canada are sitting at 30.69 MMbbl, according to data from geoanalytics firm Kayrros SAS. That’s broadly steady from May 1, but about 2 MMbbl below volumes on April 15.

More than 1,500 people were fighting fires on Sunday, while helicopters were deployed to drop buckets of water on hotspots. An additional 200 firefighters had arrived from the US, St-Onge said. More than 19,0000 residents had been evacuated.

In 2016, wildfires tore through Aberta’s oil sands, shutting down more than 1 MMbbl of daily crude production and razing whole sections of Fort McMurray, the biggest city in the oil-sands region. This month’s blazes have largely spared the oil sands, but they’ve hammered the province’s drought-stricken west, forcing the evacuation of as many as 30,000 people and curtailing natural gas output.

Operational updates

Below is a summary of operational updates from companies working in the area:

Pipestone Energy said around 20,000 boed production has been temporarily curtailed since Friday.

Vermilion Energy Inc. has restored 60% of the roughly 30,000 boed it shut this month in response to wildfires. The company cut its second-quarter output targets because of the fires.


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