Wildfires that have already scorched more than double the average annual fire destruction across Alberta forced the shut-in of more than 300,000 boe/d while threatening future shuttering of output from the so-far largely unaffected oil sands region. Record temperatures saw 92 active wildfires, 28 of which were out of control as of May 17, forcing nearly 40,000 people from their homes as evacuation orders spread primarily in the province’s northwest and into northeast British Columbia. Extreme heat and air quality warnings were in effect across much of Alberta in mid-May and, barring a significant shift in weather that brings a lot of moisture, it could be months before the fires are brought under control, according to provincial officials.
Several oil companies reported production shutdowns through the first half of May as some wildfires were contained and others ignited, though reported damage to facilities was minimal. Citing Refinitiv data, Reuters said some 319,000 boe/d, or 3.7% of Canada’s production, had been shut in, while consultancy Rystad Energy said nearly 2.7 MMbbl/d of oil sands production was at risk in “very high” or “extreme” wildfire danger rating zones. In a note, Enverus Intelligenceâ | Research (EIR) said about 500,000 boe/d could be at risk of curtailment, with roughly 10,000 producing wells affected. Production in the Deep Basin was the most impacted, with some companies shutting in more than 60% of their total production bases. The blazes bolstered the price of natural gas at AECO more than 20% while the discount for WCS oil narrowed to levels not seen in over a year.
Climate change “is proceeding right in front of our eyes,” Joseph Shea, an associate professor in environmental geomatics at the University of Northern British Columbia, told the CBC, adding that heat dome events are only going to become more frequent.
Among the companies that have announced shut-ins, Cenovus Energy shut in multiple producing conventional fields and brought down processing plants May 4, resulting in about 85,000 boe/d, primarily dry gas, impacted in the Rainbow Lake, Kaybob-Edson, Elmworth-Wapiti and Clearwater areas. Crescent Point Energy shut in its Kaybob Duvernay production. While a portion was reactivated, Crescent Point shut back in the remainder of its 45,000 boe/d because of changing wildfire conditions.
NuVista Energy shut in and depressured all operations proximal to wildfires at Grande Prairie, impacting about 40,000 boe/d. Paramount Resources advised that the third-party Wapiti gas processing facility and the company’s fields producing to the facility were again shut down May 12, with about 45,000 boe/d at Grande Prairie and Kaybob curtailed as of May 14.
Whitecap Resources reported about 26,000 boe/d was shut in over the first two weeks of May. Pipestone Energy said May 15 its operations in the Grande Prairie area are again being impacted by wildfires because of the shut-in of third-party infrastructure, with about 20,000 boe/d curtailed since May 12. Baytex Energy said wildfires impacted Peace River and Peavine operations in northwest Alberta, with about 20,000 boe/d curtailed and about 4,000 boe/d cut because of the shut-in of third-party infrastructure.
Obsidian Energy took Peace River area fields at Seal, Walrus and Nampa offline and reported about 1,200 boe/d of production would remain temporarily curtailed. Obsidian was able to restore 2,500 boe/d at Pembina as of May 17, leaving 8,500 boe/d offline in the area. In total, roughly 9,700 boe/d of the company’s production was curtailed across Peace River and Pembina.
Vermilion Energy reported that it restored about 60% of the 30,000 boe/d temporarily shut in in west-central Alberta and production guidance of 82,000-86,000 boe/d remains unchanged. Kelt Exploration shut in about 5,000 boe/d (77% gas) as of May 15 and reported it had drilled three of its budgeted five Montney wells at Oak, with drilling operations suspended. It expects to drill its remaining two wells in June.
Tourmaline Oil reported seven of its nine southern and western Deep Basin gas processing facilities previously shut in had resumed operations. Two of the facilities, West Wolf and Columbia, were undamaged and ready to resume operations awaiting final start-up clearance, with net production of about 16,000 boe/d shut in. Athabasca Oil Corp. shut in two facilities at its light oil operations at Kaybob and estimated 2,300 boe/d of temporary production downtime.
Kiwetinohk Energy announced the shutdown of production from its Placid field because of wildfires in the Fox Creek area. Its Simonette and Placid facilities remained shut in until third-party infrastructure is operational.
TC Energy said May 17 it continues to run its NOVA gas transmission and other pipeline systems in western Canada and that the Coastal GasLink project continues to progress with the project route safely away from current wildfires. It was able to complete the controlled restart of compressor units at all locations that were previously shut down because of wildfire precaution. Pembina Pipeline facilities previously shut down because of the wildfires have resumed operations.
The wildfires’ location and severity were imported into PRISM using Enverus Fusion® to analyze risks to producing wells and processing facilities. Click for more (available to EIR subscribers)!
About Enverus Intelligence Publications
Enverus Intelligence Publications presents the news as it happens with impactful, concise articles, cutting through the clutter to deliver timely perspectives and insights on various topics from writers who provide deep context to the energy sector.
