Oilsands Spending Down $1 Billion Due to Wildfires

CBJ — Alberta’s chief energy economist Matt Foss says the wildfires that swept through Fort McMurray and other parts of the province in May have resulted in the loss of $1 billion in planned capital spending in the oilsands for this calendar year.

On the bright side Foss believes those plans are deferred, as opposed to being cancelled. But he doesn’t know when or if companies will resume their spending given benchmark oil prices that remain below break- even levels.

Foss said the interruptions have dropped expected oilsands spending in the current year to $18.5 billion from $19.5 billion estimated in the province’s spring budget.

Foss said lower costs have reduced the West Texas Intermediate price at which oilsands expansion projects make money by about $10 per barrel to between $50 US and $60 per barrel — but that’s still higher than current prices in the mid-$40s.