(Adds Cenovus set to bring back non-essential staff)
By Liz Hampton and Nia Williams
EDMONTON, Alberta, May 10 (Reuters) - Oil sands companies
around the Canadian energy center of Fort McMurray began to
restart operations on Tuesday after an out-of-control wildfire
forced a week-long shutdown.
Top provincial and industry officials said production in
much of the region should ramp up soon. Facilities north of Fort
McMurray that had been shuttered largely because of heavy smoke
rather than fire were seen as likely to come back on line in a
matter of days in many cases.
While the fire continued to grow on Tuesday, officials said
it was moving to the south and east, away from the area's
largest oil production facilities and into sparsely populated
areas. A handful of smaller facilities remained under fire
threat, however, and some could not yet be reached for damage
assessments.
Royal Dutch Shell Plc RDSa.L became the first company to
resume its operation in the center of Canada's oil sands region.
Enbridge Inc ENB.TO began inspecting its facilities and
prepared to restart operations shuttered during the blaze.
"While thousands of lives will never be the same, we can
take small steps to getting back the rhythm of northeast
Alberta," Alberta Premier Rachel Notley told reporters after
meeting with executives from companies including Suncor Energy
Inc SU.TO , ConocoPhillips (NYSE:COP) Canada COP.N and the Canadian
Association of Petroleum Producers.
"For many in Fort McMurray, that means rolling up the
sleeves, and returning to work doing what they love, which is
working in the energy sector," she said in Edmonton.
Steve Williams, chief executive of Suncor, said the industry
has plenty of housing available at project sites north of the
city. Despite last week's mass evacuation, gathering a
sufficient workforce would not be a barrier to restarting
operations.
"We have a huge capability for moving significant numbers of
people," Williams said at the press conference. "In that sort of
48-72 hour period immediately following the evacuation ... we
were able to evacuate significantly more than 20,000 people."
The meeting came a day after Notley led an inspection tour
of Fort McMurray, which found that the town was less damaged
than initially feared with about 90 percent of its buildings
surviving the blaze.
But its 88,000 residents, who last week were hurriedly
evacuated as far away as the provincial capital Edmonton, 380 km
(235 miles) to the south, will not be able to return to their
homes for weeks.
Energy industry officials have been grappling with
transportation problems for staff because the specialists who
run the oil production sites were also among the residents
displaced by the blaze.
Shell said it will fly staff in and out of the region, while
Imperial Oil Ltd IMO.TO said its Kearl oil sands mining
project will remain shut until the company worked out the
logistics of moving people and materials to and from the remote
site.
But Notley said some movement of goods and materials by road
through Fort McMurray had resumed earlier on Tuesday.
Syncrude restarted power generation at its oil sands mine in
Aurora, about 80 km (50 miles) north of Fort McMurray, as it
began planning to resume operations, a spokeswoman said.
Cenovus Energy Inc CVE.TO said that it would start
bringing non-essential staff back to work at its Christina Lake
oil sands operation on Thursday, a week after it evacuated all
but essential staff under the looming threat of the fire.
TOWN STILL SMOLDERING
The blaze grew moderately on Tuesday to 229,000 hectares
(560,000 acres) and spread east through terrain with no
communities. It merged with another fire burning near Campbell
Lake, some 50 km (30 miles) east of Fort McMurray.
One area remaining under threat was Hangingstone, about 60
km (36 miles) south of Fort McMurray, and home to at least two
smaller facilities run by Athabasca Oil Co. ATH.TO and Japan
Canada Oil Sands Ltd. Both are shut, but between them account
for only about 17,000 barrels per day of output, a fraction of
the roughly 1 million barrels a day that has been lost to the
fire, half of Canada's daily production.
Notley said she believed facilities at Hangingstone were
intact, but the area was not yet accessible due to the fire
threat.
The largest-producing oil projects in the Fort McMurray area
are about 20 km (12 miles) north of the town and not in the
fire's current path. Suncor's Williams said those facilities had
not incurred damage and were closed due to smoke, not fire.
He said Suncor would not suffer any material losses from the
blaze.
The inspection of Fort McMurray revealed 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.
Officials warned it was not safe for residents to return to
the town, with parts still smoldering and large areas without
power, water and gas. Notley said repair crews will need weeks
to make the city safe.
Prime Minister Justin Trudeau told the House of Commons he
would go to Fort McMurray on Friday. Canada's labor minister
told reporters on Tuesday that the federal government would
ensure that people put out of work by the blaze receive
unemployment payments.
Canadian crude prices slipped on Tuesday, trading below the
U.S. crude benchmark, as signs of resuming production eased
supply concerns. L2N187104 O/R
Nearly all of Fort McMurray's residents escaped the fire
safely, although two teenagers died in a car crash during the
evacuation.
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