Alberta Oil Camps Set for Staff Invasion as Production ReturnsBy and
Workers who fled Fort McMurray fires heading back to camps
Suncor, Syncrude set to resume oil-sands production in days
Corey Smith got the call Tuesday night that Canada’s energy industry had been anxiously awaiting: it’s time to get back to work in the oil sands.
Smith, the head of a lodging company that runs camps for oil workers, has been going full out ever since as the industry gets set to resume production that was shut down by wildfires that have swept across northern Alberta for 13 days.
“We’re going from ‘You’re no longer able to be in these facilities’ to ‘How quickly can you get these facilities running again?’” Smith, the chief executive officer of Noralta Lodge Ltd., said by phone as he was making his way to the company’s camp north of Fort McMurray. He expected to have 3,000 workers staying at his camps by Thursday.
Smith is on the front lines of the movement to get oil workers back on the job after the inferno knocked out more than 1 million barrels a day of production from energy companies including Canada’s largest, Suncor Energy Inc., and Syncrude Canada Ltd. The oil hub of Fort McMurray, where 2,400 homes and businesses were destroyed and more than 500 damaged, is still off limits after the evacuation of almost 90,000 people from the region. Officials need another 10 days just to come up with a plan for residents to return to the city, so the industry is relying on camps like Noralta’s to house the thousands of workers needed to get plants up and running.
Companies will lose about 14 million barrels of output during the emergency and ramp-up, according to Goldman Sachs Group Inc. While producers haven’t disclosed the financial impact, a rough calculation suggests the shutdowns will lead to more than $450 million of lost revenue, based on current prices for Alberta crude. The lost volume since evacuations began on May 3 also pushed prices for Canadian natural gas to an 18-year low, as producers curtailed use of the fuel used to power and create steam for oil-sands facilities.
Calgary-based Suncor is already shuttling workers back, with dozens of extra flights leaving Edmonton’s main airport to Firebag, an oil-sands project with a capacity of 203,000 barrels a day. Two Suncor employees set up a temporary greeting table to handle the extra demand in the airport departures hall. Royal Dutch Shell Plc said it had already restarted production from its Albian Sands Mine at reduced rates.
“To the North of the city we will be able to resume operations quicker” than facilities more exposed to the fire in the south, Suncor CEO Steve Williams told reporters on Tuesday. “It’s important we do that to get back into the rhythm and start to support the economy.”
Syncrude has teams on the ground assessing its production sites near Fort McMurray to get them restarted, said Cheryl Robb, a spokeswoman.
“We’re doing everything we can to ensure a safe return to operations,” Robb said.
When the fire broke out, workers from Atco Ltd. started turning off gas supplies as a precaution and providing power and beds to emergency responders as it coordinated with other work-camp providers to house evacuees. About 25,000 Fort McMurray residents initially fled north to work camps after the main highway in and out of the community was blocked by fire to the south.
Now the Calgary-based utility and accommodations provider has 300 staff on the ground supporting the rebuild of Fort McMurray by restoring electricity and gas service and standing by with housing units ready to deploy.
“We’re prepared to ramp up and bring all of our capacity into the region that’s required,” Siegfried Kiefer, Atco chief operating officer of power and utilities, told reporters after the company’s annual meeting on Wednesday.
Enerjet, a charter airline that got the bulk of its income from ferrying workers in and out of oil-sands camps before the price crash of 2014, is considering keeping a jet it had planned to send to Europe in Alberta as it anticipates a new surge in fly-in, fly-out work after the fire.
“No one would ever remotely wish for this terrible disaster to have happened, but it did and now we have work to do and that work will create employment,” said Darcy Morgan, Enerjet’s chief commercial officer.
Horizon North Logistics CEO Rod Graham is planning the return of his staff and oil workers to its eight camps near Fort McMurray. Graham’s staff go through a detailed checklist for re-entry, including a safety briefing with staff. This time, there are twists: travel is cleared through police and emergency services as roads are still blocked in some areas for safety, and the air is full of helicopters dousing flames and transporting supplies. Staff also need to test air quality, water and infrastructure. Horizon North is organizing grief counselors to be on call.
Brian Holmes, a 48-year-old maintenance coordinator with Suncor who lives in Fort McMurray, is eager to get back to work managing mining equipment. He’s scheduled to fly back on Friday from Halifax, Nova Scotia, where he and his family have been spending time with his parents during the evacuation. He will stay at a camp north of town.
“It takes time to bring it online and we’re all dealing with our own losses,” Holmes said by phone. As far as he knows, his home is intact, but many of his colleagues lost theirs. “We want to return. I’m planning to retire with Suncor, and raise our children in the community. I love it here.”
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.