May 10, 2016 / 10:02 AM / 2 years ago

Repair crews assess Canada wildfire damage, oil firms plan restart

FORT MCMURRAY, Alberta, May 10 (Reuters) - Repair crews were expected to assess wildfire damage to the Canadian energy boomtown of Fort McMurray on Tuesday as the oil sands companies surrounding the ravaged city looked at bringing production back on line.

Political leaders got their first glimpse of the city on Monday since wildfire forced 88,000 residents to flee for safety. Alberta Premier Rachel Notley said they were encouraged by how much of it escaped destruction, estimating almost 90 percent of its buildings were saved.

But the tour also revealed scenes of utter devastation, with blocks of homes reduced to blackened foundations, front steps and metal barbecues.

Notley said 2,400 structures had burned within the city while almost 25,000 were saved.

The fire, expected to grow further on Tuesday, ravaged some 204,000 hectares (504,000 acres) of Alberta. But it also moved far enough away from the evacuated town to allow an official delegation to visit on Monday.

Officials warned it was not safe for residents to return, with parts still smoldering and large areas without power, water and gas. Notley said repair crews will have weeks of work ahead of them to make the city safe.

The assessment by officials came a few hours after insurance experts revised sharply downward their estimates of the cost of damage from the blaze, which began on May 1.

Cooler weather, which has helped firefighters battling the blaze, was expected to linger through Thursday, according to Environment Canada. Still, much of Alberta is tinder-box dry after a mild winter and warm spring.

Fort McMurray is the center of Canada’s oil sands region. About half of its crude output, or 1 million barrels per day, has been taken offline, according to a Reuters estimate.

Oil sands companies, which have high fixed costs, are expected to work as quickly as possible to get production back online, but face the challenge of many staff and suppliers being displaced by the evacuation.

In one encouraging sign for industry, Royal Dutch Shell Plc said on Monday it restarted production at a reduced rate at its Albian oil sands mining operation in Alberta, adding it plans to fly staff in and out.

But Imperial Oil said late on Monday it completed a controlled shutdown of its Kearl oil sands mining project, blaming the uncertainties associated with logistics.

Writing Jeffrey Hodgson in Toronto; Editing by Ryan Woo

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