SHARE
Image courtesy of DarrenRD/Wikimedia Commons.

Suncor has reportedly estimated that the wildfires near Fort McMurray, Alberta will cost the company over $700 million.

Sources close to the matter told Reuters on Tuesday that Suncor is estimating that the fires will cost the company about C$1 billion ($780 million).

Suncor began restarting its oil sands operations near Fort McMurray on May 29 after a mandatory evacuation order was lifted.

The company said last week that it is ramping up production in a “staged manner” and expects that all of its operations in the Regional Municipality of Wood Buffalo to be producing at normal, pre-turnaround rates by the end of June.

Suncor now expects its annualized total upstream production to be between 585,000 and 620,000 barrels per day.

Annualized synthetic crude oil sales are estimated at 265,000 to 275,000 bpd and exported bitumen is estimated at 100,000 to 120,000 bpd.

Syncrude production is estimated at between 105,000 and 115,000 bpd, excluding the planned acquisition of Murphy Oil Company Ltd.’s 5 percent stake in the project.

The company’s production guidance for its exploration and production unit has been increased to between 105,000 to 110,000 bpd.

Suncor expects incremental costs incurred to respond to the fires will be “more than offset by variable cost savings during the outage.”

The company added that its facilities were not damaged by the fires.

Sources close to the company told Retuers that Suncor’s thermal operations were not coming back online as quickly as the company had anticipated due blockages.

A company spokesperson told the news agency that its return to operations is “going as planned.”

Company sources also told Reuters that Suncor has about six months worth of inventory at its main mining facility.

The wildfires began in early May, forcing nearly 90,000 residents to evacuate and temporarily shutting down several oil sands production facilities.

At the height of the blaze, an estimated 1.1 million barrels of production was disrupted, according the the U.S. Energy Information Administration.