Wildfire evacuations disrupt Canada oil production | Business| Economy and finance news from a German perspective | DW | 06.05.2016
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Wildfire evacuations disrupt Canada oil production

The out-of-control wildfire that is scorching large swathes of land and displacing thousands of people in Alberta, Canada, has also knocked out nearly a third of Canada's daily crude oil production.

On Friday, firefighters continued to battle a massive blaze that has ravaged the Canadian oil town of Fort McMurray, forcing many oil companies in the heart of Canada's oil sands region to reduce or cease production as a precaution.

The fire has engulfed entire communities, and officials are now warning that two oil sands sites south of the city are in danger. The region has the third largest reserves of oil in the world behind Saudi Arabia and Venezuela.

One, a facility known as Long Lake that is owned by Nexen Energy, a subsidiary of China's CNOOC, can produce around 50,000 barrels per day (bpd), although it's been operating at reduced rates since a deadly explosion at the plant in January.

The other, Athabasca Oil Corp's Hangingstone Project, also sits in the fire's projected path as winds have shifted. Currently, the fire is about three miles (five kilometers) away. The exact production capacity of that facility wasn't clear, but the company said on its website that it plans to pump 12,000 bpd by the end of the year.

Kanada Waldbrände bei Fort McMurray

Rescue workers have begun evacuating up to 25,000 residents.

Ghost facilities

Thousands of homes have also been destroyed. By Thursday, rescue workers had begun airlifting around 25,000 people from Fort McMurray. The evacuation was ordered after firefighters backed by air tankers and helicopters failed to get the blaze under control.

At least 680,000 bpd of capacity was offline on Thursday, according to an estimate by Reuters. Other calculations put that number considerably higher, saying as much as 1 million bpd might be affected.

Even though the infrastructure for oil and gas production in the region remains largely unaffected, output is down because so many employees have been evacuated.

Imperial Oil Ltd said it had reduced workforce levels at its Kearl oil sands mining facility to essential staff only. ConocoPhillips said it had shut its Surmount operations and cleared the site. Suncor Energy Inc, whose oil sands operations are closest to Fort McMurray, also closed its main mining site, which can produce up to 350,000 bpd on a normal day.

cjc/uhe (Reuters, AFP, AP)

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