Advertisement

Athabasca Oil to shut down oilsands project due to drop in oil prices, COVID-19 pandemic

Alberta oilsands struggling as Western Canadian Select plunges to $5 per barrel
WATCH ABOVE: Alberta's oil and gas sector may be facing its toughest challenge yet, as tumbling oil prices have forced companies to rollback production and layoff staff. Adam MacVicar reports.

Athabasca Oil Corp. is suspending operations at its Hangingstone SAGD oilsands operation due to the drop in oil prices and the COVID-19 pandemic.

The company says it’s also reducing its corporate staff by 15 per cent.

READ MORE: Alberta oilsands struggling as Western Canadian Select plunges to $5 per barrel

The shutting down of Hangingstone involves shutting in the well pairs and halting steam injection to the reservoir as well as ensuring that the processing facility and pipelines can be re-started in the future.

[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]

Athabasca says the project has an operating break-even price of approximately US$37.50 per barrel for Western Canadian Select, which was trading for US$9.92 per barrel midday.

Alberta unemployment forecast to reach 9.5% amid COVID-19 pandemic: economist
Alberta unemployment forecast to reach 9.5% amid COVID-19 pandemic: economist

The company says it now expects to produce 30,000 to 31,500 barrel of oil equivalent per day this year, down by about 2,500 barrels related to the shut-in.

Story continues below advertisement

Hangingstone began construction in 2013 and was commissioned in 2015.