July 26 (Bloomberg) -- Canadian Natural Resources Ltd., the nation’s largest producer of heavy crude, fell the most in more than three months on concern that output next year will be affected due to a leak at its Primrose oil-sands project.
Canadian Natural, based in Calgary, dropped 4.5 percent to C$32.20 at the close in Toronto, the most since April 15.
The Alberta Energy Regulator told Canadian Natural to restrict steam injections at its Primrose and Wolf Lake projects after a leak was reported at Primrose in June. Bitumen emulsion, a mixture of the heavy crude oil and water, oozed to the surface to cover about 20.7 hectares (51 acres), according to a statement e-mailed from the company yesterday.
“The chatter going on in the market is that might impact their 2014 production,” Sameer Uplenchwar, an analyst at Global Hunter Securities LLC in Calgary, said in a phone interview today. “Primrose is 15 percent of the company’s total production.”
It’s the fourth leak reported this year at Primrose, according to the regulator, which is investigating the site. Canadian Natural said the leak may have been caused by “mechanical failures of wellbores.” The same project had a leak in 2009 and the regulator said in January that the company’s investigation was inconclusive. Higher-than-normal injection volumes may have contributed to the 2009 release, the regular said.
There’s a “question mark” around whether the regulator will order Canadian Natural to restrict steaming next year, Uplenchwar said, noting that the 2009 leak affected the company’s output for nine months. Primrose is about 350 kilometers (217 miles) northeast of Edmonton.
Primrose uses high-pressure cyclic steam stimulation to extract bitumen, a technology used for more than three decades, the regulator said. The method involves injecting high-pressure steam into a reservoir over a prolonged period to soften the bitumen and separate it from the sand. The pressure creates cracks through which bitumen flows to the wells.
Canadian Natural’s investor relations department didn’t respond to e-mail and phone messages today. Cara Tobin, a spokeswoman for the regulator, said in a phone interview today the leak continues at Primrose.
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