Cenovus further slows production due to Alberta fires

CALGARY — Cenovus Energy Inc. further slowed production from its Pelican Lake oil operations Wednesday as wild fires continued to wreak havoc across northern Alberta.

CALGARY — Cenovus Energy Inc. further slowed production from its Pelican Lake oil operations Wednesday as wild fires continued to wreak havoc across northern Alberta.

The major Calgary oil company (TSX:CVE) is currently producing about 8,000 barrels per day from those operations, about 90 kilometres from the devastated town of Slave Lake, Alta.

Normally Cenovus produces about 22,000 barrels per day there, and its output was about half that on Tuesday.

The flames weren’t posing a danger to the site itself, but there’s nowhere for the oil to go while power to a nearby pipeline remains cut. Its storage tanks are quickly filling up.

“We expect to remain at about that level until early Thursday morning when our storage tanks will be full,” said Cenovus spokeswoman Rhona DelFrari.

“At that time, if the pipeline is still closed, we would have to stop production.”

Canadian Natural Resources Ltd. (TSX:CNQ) and Shell Canada Ltd. also rely on Plains Midstream Canada’s Rainbow pipeline to move their crude, and have slowed or shut-in production as a result.

Another portion of the line broke last month, spilling 28,000 barrels of crude. The wildfires have hampered cleanup efforts there.

Pengrowth Energy Corp. (TSX:PGF), Penn West Exploration (TSX:PWT) and Exall Energy Corp. (TSX:EE) are among other energy names to halt production because of the blazes.

Husky Energy Inc. (TSX:HSE) has facilities to the north and east of the Slave Lake town site, said spokesman Graham White.

“All company facilities in the area have been, and will continue to be, evaluated for potential risk due to the spread of the fire and evacuated or shut-in as required,” he said.

“But our shut-ins have been very limited and we’ve had no material effect on our production.”