Canadian oil prices witnessed a significant increase, after the production of about 320 thousand barrels per day, or 3.7% of the country’s production, was halted due to the ongoing forest fires in Alberta 5 days ago.
The fires also restricted natural gas processing operations to approximately 450,000 cubic feet per day, according to information seen by the specialized energy platform.
As a result, Canadian gas exports to the United States fell at 6.7 billion cubic feet per day on Sunday (May 7, 2023), the lowest level since April 2021, according to Refinitiv data.
The closures came in a precautionary manner, and mainly affected the traditional lighter crudes, as about 11 Canadian oil and gas companies announced a reduction in production or a complete halt in some facilities.
Canadian oil prices in 2023
In this context, Canadian oil prices rose, with Platts valuing Edmonton’s Syncrude Sweet Premium crude 80 cents higher on a daily basis, at $2.80 a barrel over WTI.
Sweet blend in Edmonton was also up $1.15 on a daily basis, at $2.75 a barrel below WTI, according to S&P Global Platts.
The valuation of condensate in Fort Saskatchewan increased by about 55 cents a barrel, at $3.50 a barrel below WTI.
Western Canadian Select in Hardesty rose 30 cents, valuing it at $13.85 a barrel below WTI.
Canadian oil shutdowns
Novista Energy announced that it has shut down production of about 40,000 barrels per day of oil equivalent in the Grand Prairie region, along with all operations near the ongoing fires.
“The closures began partially on May 5, and their scope expanded after the closure of the infrastructure serving production,” she said, noting that she was not aware of the damage to her facilities.
Bitex Energy, a light and heavy oil producer, has reduced nearly 10,000 barrels per day of oil equivalent (70% crude oil) of sales volumes since the evening of May 5, due to infrastructure shutdowns in central and northwest Alberta. .
And she said that 60% of the reduced quantities remain in operation and are transferred to stocks, according to information monitored by the energy platform, quoting the “S&P Global Platts” report.
Vermillion Energy, which focuses on producing light oil and liquid-rich natural gas, has shut down nearly 30,000 barrels per day of oil equivalent while it assesses risks to its operations as wildfires surround the company’s operations in west-central Alberta.
“We have located all our employees and contractors in the affected areas to ensure their safety, and our assessment so far indicates minimal damage to our key infrastructure,” she said.
Production halt is temporary
Pipestone Energy said its operations in the Grand Prairie area were affected by the ongoing wildfires, which led to a precautionary halt of 20,000 barrels per day of oil equivalent, as well as the shutdown of related infrastructure.
She explained that the closures have been in effect since the evening of May 5, adding that she is not aware of any “significant damage or loss to infrastructure owned by her or a third party.”
“While the timing remains uncertain, Pipestone is ready to resume production as soon as the currently closed infrastructure is restarted,” it said, according to the statements seen by the specialized energy platform.
For its part, Crescent Point Energy has stopped production of about 45,000 barrels per day of oil equivalent in Caebope DuVernay, adding that it has taken precautionary measures to protect the safety of its employees, society, the environment and assets.
It described the production outages in barrels of light oil and natural gas liquids as “temporary” and said it plans to resume production as soon as it is safe and receives permission from the Alberta energy regulator.
Separately, Paramount Resources said it shut down approximately 50,000 barrels per day of oil-equivalent production and related infrastructure in the Grand Prairie and Kaipop regions, with all of its affected employees safely evacuating.
She explained that the reduction is temporary, and has been implemented since the evening of May 5, coinciding with the outbreak of forest fires.
Other companies affected
For its part, the “Synophus” company said that the production of about 85 thousand barrels per day of oil has been affected in some of its operating areas due to forest fires, according to what was reported by Reuters.
The “Kandyan Natural Resources” company indicated that there are about 39,000 barrels per day of production temporarily suspended, stressing that oil sands mining has not been affected, and continues to work safely and steadily.
Whitecap Resources also reported halting production of light oil and natural gas liquids from its facilities in northern Alberta and northeastern British Columbia, though the company did not provide specific numbers.
Pembina said the current shutdowns include the Saturn 1 and 2 gas stations at the Saturn complex and the Duvernay complex, with a combined processing capacity of 443,000 cubic feet per day.
It added that it had temporarily shut down the Peace Pipeline oil system, a 20-inch line from Fox Creek, Alberta, to Edmonton, due to the fire, and later restarted it.
Tourmaline Oil said it had shut down 9 gas processing facilities in the south and west of the deep basin, starting May 5.
She added that she is not aware of any damage to these facilities so far, and that access to the sites is currently prohibited, without giving any number regarding production volumes after the closure.
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