Cenovus to resume output as fire brought under control

CALGARY — Cenovus Energy Inc. said its biggest Canadian oilsands site will be fully operational by Monday as firefighters make progress in bringing a nearby blaze under control.

Startup is going as planned at the 135,000-barrel-a-day Foster Creek project, the company said Thursday. The site near Cold Lake in northeastern Alberta was shut almost two weeks ago because of the wildfire. Canadian Natural Resources Ltd. said Wednesday it’s ramping up production at its Kirby South oilsands site after a pipeline restarted, while its 80,000-barrel-aday Primrose project remained closed.

The blaze covered 31,000 hectares Friday and was 79 per cent contained, wildfire information officer Shannon Stambaugh said in a phone interview. The fire has shut about 230,000 barrels a day of oilsands production, 10 per cent of Canada’s output.

Heavy Western Canadian Select crude’s discount to U.S. benchmark West Texas Intermediate narrowed 70 cents to $7.45 a barrel at 12:06 p.m. Mountain time, data compiled by Bloomberg show. The discount shrank to $7 on June 2, the narrowest since 2009. WCS rose $1.04 to $50.89 a barrel.

“Give the price curve a chance to react,” Harold York, vice-president of integrated energy research at consulting company Wood Mackenzie Ltd., said by phone Friday. “That differential should widen out a bit when Cenovus says they are bringing volume back.”

The country will produce 2.3 million barrels a day from the sands this year, according to the Canadian Association of Petroleum Producers.