Even as firefighters battle the Fort McMurray blazes, the arrival of bankers and appraising officers in lodging camps suggest the resurrection of the oilsands’ hub has already begun.
“The first phase was safety,” said Rod Graham, president and chief executive officer of Horizon North Logistics Inc., which provides lodging services to the oilsands. “Now we are in the second, assessment phase and have insurance people, adjusters, cleaning people and bankers in our camps.”
Workers from major oilsands companies Suncor Energy Inc. and Royal Dutch Shell Plc. are also returning to Horizon’s camps as the industry brings back 1.2 million barrels per day of oil that went offline after wildfires led to the evacuation of the entire Fort McMurray town.
Oil’s great day takes turn for worse as Alberta oilsands output gears back upOilsands around Fort McMurray to fly workers in and out of sites to get operations restarted quickly
Like other lodging companies, Horizon opened its doors as fires raged across vast swathes of the Wood Buffalo region in northeastern Alberta, sheltering about 1,250 people at its facilities.
Graham, who lost his own house in the 2013 floods in Calgary, said Horizon and its competitors collaborated and stepped up to do their part for the community.
“They are hurting, but they are out there helping out peers and citizens — nobody’s really quantifying the cost, they are just getting it done,” says Mark Salkeld, president and chief executive of the Petroleum Services Association of Canada, which represents the interests of the oil services companies.
But now the industry is gearing up to be at the forefront of the turnaround.
“The need to do maintenance and repairs, the need for somebody’s turnaround is going to be there, and it may actually exemplify itself more post the recovery of the fires,” said John Barkhouse, chief executive officer of Newalta Corp., which provides waste disposal and recycling solutions for oil and gas customers.
As the town of 80,000 was evacuated, Suncor, Shell and Imperial Oil Ltd. shut production, which may be tricky to restart.
“Once you take assets offline and shut them down, interesting things happen when you bring them back online,” Barkhouse told investors in a conference call. “It doesn’t always go perfectly smooth.”
The latest crisis has added to the woes of an industry reeling from an 18-month oil-price decline that has led to bankruptcies, drastic cuts in wages and layoffs.
The Fort McMurray fires, however, should see some activity returning.
“The facilities management companies will be the first ones in and as producers go back to regular operating, they will require maintenance crews,” Salkeld said. “The companies involved in the start up, turnaround and the ongoing maintenance, those will be going in first.”
Everybody is anxious obviously to get back to work, get their facilities up and running
Shell said it has restarted production at 250,000-bpd Albian mining joint venture at reduced rates, as it looks to provide fuel to the firefighters, ambulances, planes and others dedicated to the response efforts.
Suncor said its Syncrude asset is in the process of planning its return to operations.
“We’ve engaged a number of services including mechanical, inspection, controls and various support services, such as vacuum trucks, scaffolding, water supply,” Sneh Seetal, spokesperson at Suncor said in an email.
Newalta is working with partners to resume production in Fort McMurray.
“Everybody is anxious obviously to get back to work, get their facilities up and running,” Barkhouse said.
Horizon, which this month acquired a company that builds prefabricated buildings, is getting inquiries from companies to build new residential homes and retail and commercial offices as the rebuilding phase kicks off in earnest over the next few months.
“Fort McMurray will get rebuilt and we will be part of that solution,” Graham said.