Scotford site activity delayed as COVID-19 affects oilpatch
EDMONTON Shell is delaying crucial maintenance at its Scotford site as the COVID-19 pandemic continues to impact Alberta’s oil and gas industry.
Activity on the site’s upgrader is being pushed back to later this year in an effort to minimize the spread of the disease, the company said Wednesday on Twitter.
“Our decision to delay the turnaround stems from that deep sense of care for our Shell employees and the contractors who support us as well as the health and well-being of everyone who works at Scotford,” spokesman Conal Macmillan said Thursday, noting the company paused prework at the site two weeks ago.
Macmillan said the company does regular maintenance but brings in contractors for more specialized work such as for the upgrader.
The Scotford site, located more than 50 kilometres northeast of Edmonton, has roughly 1,300 employees and Shell has asked non-business critical staff to work from home. Macmillan couldn’t say how many are on-site at a given time as the number fluctuates depending on the work being done.
Earlier this week, Suncor announced that essential personnel would be allowed to work on-site and at offices. The company says product demand in Canada is starting to go down, a trend that’s expected to continue over the next few months.
“Suncor has begun to adjust refinery utilizations as a result,” the company said. “Due to significant uncertainty, we have not yet updated our guidance in this area, although we anticipate it will be lower.”
Ben Brunnen, vice-president of fiscal and economic policy at the Canadian Association of Petroleum Producers (CAPP), said the Canadian oil and natural gas industry is used to global markets going up and down but COVID -19 and the price war between Saudi Arabia and Russia has taken a toll.
“In January, the (CAPP) forecast capital expenditures for the Canadian upstream oil and natural gas industry would rise to $37 billion in 2020, compared to a 2019 estimate of $35.1 billion,” he said. “Our forecast also showed an increase in spending in the oilsands, something industry hasn’t seen since 2014 ... In March, producers have cut more than $5.7 billion in capital expenditures, and based on recent announcements companies have now cut their capital spending programs by approximately 30 per cent.”
Meanwhile, gas prices continue to drop with Edmonton seeing pumps below 60 cents a litre. Gasbuddy.com listed some at 58.4 cents per litre on Thursday.