June 1, 2015 / 10:53 PM / 3 years ago

UPDATE 1-CNRL inspecting evacuated oil sands site, fires still burn

(Adds Canadian Natural inspecting site in paragraphs three through five; updates prices in final paragraph)

By Nia Williams and Scott Haggett

CALGARY, Alberta, June 1 (Reuters) - Firefighters made progress tackling wildfires in the key oil-producing region of northern Alberta on Monday that shut in 10 percent of total oil sands production and workers are beginning to return to assess the damage.

For more than a week, 233,000 barrels per day of oil sands crude has been shut in after companies with facilities close to uncontrolled wildfires rushed to evacuate staff. The Western Canadian province of Alberta is the major source of U.S. oil imports.

Canadian Natural Resources Ltd said it has been allowed access to its Primrose oil sands project in Alberta’s northeast, where production was suspended and workers evacuated due to the wildfire threat.

“A Canadian Natural team of operational staff were permitted access to implement a ... recovery plan, including the inspection of facilities and equipment, and the completion of repairs, if required,” the company said in a statement. “Following this assessment, pre-start activities towards resuming full operations will begin.”

Canadian Natural said the assessment will determine when 80,000 barrels per day of production can resume.

Over the weekend the number of fires dropped to 35 from 42 on Friday. Five are classed as out of control.

The wildfire hazard in the Lac la Biche region, where Cenovus Energy Inc and Canadian Natural evacuated workers, was downgraded to “moderate” from “extreme” by the Alberta government.

The 31,000-hectare (77,000-acre) blaze continues to burn uncontrolled on the air weapons range, about 15 kilometres (nine miles) from Cenovus’s Foster Creek site and 25 kilometres from Canadian Natural’s Primrose project.

“Once the range is deemed safe and any hazards have been addressed, a small group of Cenovus essential staff will be allowed to return to Foster Creek,” the company said in a statement. “They will inspect the facility, ensure safety and security systems are operational and begin start-up procedures.”

Cenovus also had no estimate on when production would resume.

A 3,000-hectare wildfire burning near MEG Energy Corp’s Christina Lake site also remained out of control.

Statoil ASA had evacuated nonessential staff from its 20,000 bpd Leismer oil sands project with no impact to production, and said on Monday it hoped to remobilize evacuated workers this week.

In the Canadian crude market, Western Canada Select heavy blend crude for July delivery rose around 85 cents to trade at $7.10 per barrel below the West Texas Intermediate benchmark, the narrowest differential in more than five years.{ID:nL1N0YN2HJ] (Editing by Peter Galloway and Christian Plumb)

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