Hundreds more oilsands staff evacuated on Alberta fire threat

9 per cent of total oilsands output suspended
By Scott Haggett and Nia Williams
||Last Updated: 05/27/2015

CALGARY (Reuters) — Statoil ASA, MEG Energy and Cenovus Energy evacuated hundreds of workers from three oilsands projects in northeastern Alberta on Tuesday as wildfires raged through the key crude-producing region.

The latest evacuations are in addition to project shutdowns by Cenovus and Canadian Natural Resources over the weekend, as companies rushed to remove staff from potential danger.

At least 233,000 barrels per day of oilsands production, nine per cent of Alberta's total oilsands output, have been suspended because of the fire risk, though none of the projects have been damaged.

The Alberta government said there are 70 forest fires now burning in the province, with 20 considered out of control. Lightning storms are forecast for Tuesday evening, increasing the risk of more fires, a government spokesman said.

Cenovus evacuated all 90 staff from its Narrows Lake oilsands project on Tuesday, which is not yet producing crude after construction was deferred last year.

The company also shut down its Birch Mountain natural gas plant northwest of Fort McMurray.

Statoil evacuated around 110 non-essential employees from its 20,000-bpd Leismer project as a precaution, although production is unaffected and the company does not anticipate shutting down operations. About 75 employees remain on site for now.

"We will evacuate and pare down even further by Friday and keep the bare minimum of people on site," a Statoil spokeswoman said.

MEG said in a statement that there was no safety risk yet, but it suspended operations at its 80,000-bpd Christina Lake oilsands project and halted work on a planned maintenance shutdown.

"As soon as we have safety clearance regarding fire hazards, we will resume normal operations," the company said.

The production shut-ins could impact economic growth, Bank of America Merrill Lynch warned in a research report, forecasting that if wildfire disruptions persist there could be a 0.1 per cent to 0.3 per cent hit to second-quarter annualized growth.

Several small towns threatened by fires have been evacuated in other parts of the province.

Over the weekend, Cenovus and Canadian Natural halted output at two sites as a precaution against a fast-spreading fire in the Cold Lake oil sands region ofAlberta.

Both companies on Tuesday said there had been no changes to the status of those projects.

Husky Energy Inc said its operations in the Cold Lake region have not been affected by the blaze, though it suspended operations at its Muskwa natural-gas processing plant and its Overlea compressor facilities in north central Alberta due to other fires. Six employees were evacuated from the sites.

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