More oil patch names cut output due to fires

More oil companies cut production at their sites in northern Alberta due to wildfires in the surrounding area.
Smoke obscures Highway 2 outside Slave Lake, Alta., on Monday. The area's oil industry is now under threat from the devastating flames. (Ian Jackson/Canadian Press)

More oil companies cut production at their sites in northern Alberta due to wildfires in the surrounding area.

Canadian Natural Resources Ltd. has cut output at its Pelican Lake site, about 90 kilometres north of the fire's epicenter of Slave Lake, because of more than a hundred wildfires burning across the province.

Although the CNQ site itself is not believed to be under fire threat, power has been cut to the surrounding area, which means a nearby pipeline can't take the facility's output away.

The company has been storing its excess oil in tanks, but those are almost full. If the pipeline doesn't start up in the next day or so, oil production will have to stop altogether, COO Steve Laut said Tuesday.

At peak capacity, the CNQ site produces 40,000 barrels per day.

Cenovus Energy Inc. has encountered similar problems at its nearby site, which produces 22,000 barrels a day. Production there may also have to be cut entirely on Wednesday because of the pipeline loss, the company said Tuesday.

The pipeline that services the area was already at reduced capacity because of a spill that poured 30,000 barrels into the surrounding area at the end of April along the pipeline's northern stretch near Peace River.

Now fire and power cuts are threatening the same pipeline further south.

On Monday, a fire within 150 metres of work camps near CNQ's Horizon Oil Sands site forced the company to remove 1,300 personnel from the area. Production at that site near Fort McMurray has already been slowed due to a fire in January.

The forest fires have temporarily halted repairs to the plant's upgrader, which was damaged in a fire in January, the company said Tuesday.

Energy woes

Another Calgary-based oil producer, Exall Energy Corp., said it had shut production, 921 barrels of oil equivalent daily, at its Marten Mountain field.

Exall is assessing the effect the fires have had on its infrastructure and equipment.

"Aerial surveillance of the Marten Mountain area indicates that Exall's facilities and operations have not currently been impacted by the fires and are not at this time under threat from the fires," the company said in a release. "The fires currently appear to be south and east of Exall's Marten Mountain operations."

Calgary-based Penn West Petroleum said it has shut in 25,000 to 30,000 barrels a day of heavy oil production in north-central Alberta and suspending drilling in the region.

"We are monitoring the spread of the fire and the potential for additional production shut-ins," the company said in a release. Penn West's operations have also been affected by flooding in Manitoba and Saskatchewan, curtailing the company's total daily production by about 20 per cent or 35,000 to 40,000 barrels of oil equivalent.