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 233,000 barrels a day, Bloomberg said May 25.
The out-of-control fire near Lac La Biche was discovered on Saturday and covered 8,200 hectares (20,260 acres), Alberta’s Environment and Sustainable Resource Development agency said on its website.
Crude output was cut by 18,000 barrels a day to 12,000 at the site, Julie Woo, a company spokeswoman, said in an e-mail Monday. Canadian Natural yesterday said 80,000 barrels a day of production was shut at its Primrose facility, and Cenovus Energy Inc. closed its 135,000-barrel-a-day Foster Creek operations on the Cold Lake Air Weapons Range in northeastern Alberta.
The production affected by the blaze amounts to about 10 percent 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,” Bart Malek, analyst at TD Securities in Toronto, said by phone. “It tightens supply up.”
Heavy Western Canadian Select traded at an average discount of $8.66 a barrel 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 million cubic feet per day of gas 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 million barrels a day 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.
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