On July 4, Suncor Energy Inc., one of the largest oil sands producers in Canada, elected to curtail production at its Firebag production site due to the proximity of a nearby wildfire. Firebag is an in-situ bitumen facility (meaning that the bitumen is heated by steam that is pumped underground in order to heat the bitumen and allow for its extraction to the surface by wells) located 120 kilometers (~73 miles) to the northeast of the city of Fort McMurray (yellow region in map below). The shut down is precautionary in nature and no personnel have been injured or production facilities damaged at this time. Media reports place the wildfire about 8 kilometers (~ 5 miles) to the northeast of the Firebag site. Given the inherent uncertainties surrounding the dynamics of the wildfire, the duration of the production curtailment is not known at this time.
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Alberta Wildfire Could Be Curtailing Oil Sands Output In the Range of 200 Mb/d
Back in the High Life Again - The Oil Sands Rebound from May 2016 Wildfires
Three months after a series of devastating wildfires wreaked havoc in Alberta’s oil sands region, production is essentially back to normal. Temporary shutdowns at several production sites initially reduced the oil sands’ output by more than 1 MMbbl/d –– or about one-third the area’s pre-fire production level –– which trimmed inventories and goosed world oil prices. But the short-term closures appear to have had little effect on the Canadian and U.S. refineries that process oil sands-sourced crude. Now, oil sands producers (stung more than many by the collapse in oil prices) are focused again on reducing production costs in an effort to stay profitable in a low-oil-price era. Today, we summarize the current, post-wildfires state of oil sands production and consider the region’s future in the new, tight-oil/Shale Revolution world.
Turn Around, Look at Me - Maintenance to Curb Alberta's Synthetic Crude Oil Production This Spring
Production of synthetic crude oil that is processed from Alberta’s oil sands reached record highs at the end of 2020 after touching on two year lows just four months earlier. However, these highs could be undermined and sink to four-year lows for a short period of time this spring with what appears to be a heavier than usual slate of maintenance work on three of Alberta’s four upgraders, the immense processing units that produce synthetic crude oil from bitumen. In today’s blog, we take a closer look at the upgraders, the timing of maintenance, and what this might mean for synthetic crude oil production and exports.
