Canada's upgraded bitumen output for May is expected to be more than halved, with yearly output dropping below the 1 million b/d mark, according to the National Energy Board's revised production estimates released Friday.
The NEB now estimates May upgraded bitumen at 492,550 b/d, down from 1,019,472 b/d in its last update in January. June production was revised to 651,358 b/d, down from 1,019,940 b/d over the same period. The agency expects 987,195 b/d in upgraded bitumen for 2016, down from an earlier estimate of 1,047,698 b/d.
Non-upgraded bitumen estimates for May similarly fell to 1,056,551 b/d in the latest update, compared with a projection of 1,464,640 b/d pre-fire. June production was revised to 1,409,473 b/d from 1,476,504 b/d over the same period. That drives down the NEB's 2016 estimate of 2016 non-upgraded production to 1,454,366 b/d from 1,481,888 b/d.
Still, the latest production estimate revision only changes western Canada's 2016 output to 3,698,693 b/d from 3,707,860 b/d.
NEB Supply Analyst Peter Budgell said the bulk of the revisions were due to the wildfires, including reports of June Syncrude delivery cuts and the typical one- to three-week restart time of steam assisted gravity drainage oil sands facilities also factored. He said it's unlikely producers could recoup the majority of lost production in later months, but that it was too early to revise those estimates.
The wildfires, which began May 1, knocked as much as 1.27 million b/d of production offline, according to a Platts analysis. Companies began announcing restarts last week as the fires moved east, away from production sites.
