8,477 Active Recruiters     Over 2 Million Candidates Globally

  1. Keep me logged in
  2. forgot password

Checkout Jobs Basket (0)

You can checkout a maximum of 150 jobs.

Signup Better for Candidates

  • Create a free virtual CV and let recruiters find you
  • Automatically have your profile matched to suitable Oil & Gas positions
  • Link to your profile using it as a free online CV
  • Store all your employment documents to your profile for easy sending
  • Always receive feedback on positions applied for

Signup Better for Recruiters

  • Suitable candidates automatically matched to your position
  • View candidate profiles for free
  • No more waiting for candidates to respond to job advertisements
  • Only ever pay when you match a candidate to a position
  • No more cold calling and sorting through out dated CVs

Canadian Oil Companies Losing $50 million a Day as Fires Rage

Published in Oil Industry News on Sunday, 22 May 2016

Graphic for News Item: Canadian Oil Companies Losing $50 million a Day as Fires Rage

Out-of-control wildfires that have consumed over a million acres of land in Canada's Alberta are costing oil companies as much as $50 million a day in lost production, according to analysts.

Alberta's oil producers curtailed production by May 5 as fires prompted the evacuation of Fort McMurray, a central production hub. By May 9, more than 1 million barrels of daily oil output had been halted.

"We estimate total daily pre-tax profit loss at $45 to $50 million," Barclays analyst Paul Cheng said in an email to Reuters.

For many companies, the shut-ins will translate directly to lower revenue in the second quarter, said Chris Feltin, an analyst at Macquarie Capital in Calgary.

"The big thing here is that business interruption insurance is unlikely to be claimed because the damage isn't direct to their facilities, so this is something that is going to roll through on a revenue and cash-flow basis on the second quarter," Feltin said.

There is no guarantee on how soon production will return to normal.

Both more expensive light synthetic crude and cheaper heavy bitumen from oil sands production have been shut in, with a total of more than 1.2 million barrels of production offline, said Feltin. "That's a fair amount of production for both crude slates that is offline."

Syncrude trades at a premium to benchmark U.S. crude futures, while Western Canadian Select crude trades at a discount, and bitumen is offered for even less.

The spot price of Syncrude is currently $51 a $52 a barrel, said Cheng. Syncrude for June delivery is trading at $3.20 a barrel above the price of U.S. crude futures.

WCS is trading at about $37 to $38 a barrel, he said, and bitumen is currently at about $33.50 a barrel.

About 476 million bpd of synthetic crude production and 567 million bpd of bitumen production are offline due to the fire, Cheng wrote on Friday. An additional 300,000 bpd of synthetic crude production is offline due to maintenance.

Looking exclusively at the fire-induced shut-ins, that would indicate total losses are about $45 million. That number can be cut slightly because Suncor's upgraders produce about 40 percent synthetic light oil as well as a combination of light sour crude and diesel fuel, Cheng said.

As a result, Suncor's overall realized price is lower than syncrude by about 10 percent, Cheng said.

He estimated total daily pre-tax profit losses at $30 million to $35 million for mining and upgrading operations, and another loss of $15 million a day for oil produced using SAGD, an enhanced oil recovery technology for bitumen and heavy crude.

Suncor shares have lost 6 percent since the beginning of May.

Source: www.offshoreenergytoday.com

Please leave comments and feedback below


Canadian Oil and Gas, Canadian Oil Sands, Alberta Oil Sands, Canadian Wildfires, Oil and Gas News

Oil and Gas News Archive

Latest Oil & Gas News

Featured Companies

  • View All JobsOMPA

    Offshore Marine People & Academy (OMPA) is a global provider of personnel and training to the renewables, oil & gas, telecommunications and marine industries.

    With over 15 years' industry experience, we work with candidates to match them to the right roles and equip them with the skills and knowledge needed to succeed. Our job is to exceed your expectations.

    Visit us online: offshorempa.com

  • View All JobsChronos Oil and Gas

    Chronos Oil and Gas is one of the fastest growing and best placed recruitment agencies in the sector.

    With over 300,000 candidates on our database and an international team of specialist recruiters we work with clients to staff major projects around the world.

    Register your CV at www.chronosoilandgas.com

  • View All JobsNatural Resources

    Natural Resources is a UK based recruitment company providing personnel of all disciplines and nationalities worldwide.

    We represent clients and candidates at all levels who operate globally within oil & gas, renewables, nuclear, power, mining, marine, drilling, construction and petrochemicals. Our client base includes energy and construction.

    Visit Natural Resources at natural-resources.com