On Saturday, a fire erupted at a Mildred Lake upgrader at the site of the Syncrude project, the largest producer of synthetic crude in Canada. While emergency crew were able to contain the blaze, production of synthetic crude oil has been put on hold while Syncrude develops a “recovery and repair strategy” and restores equipment.
Initial estimates of the fire damages are unknown, but Canadian Oil Sands Limited has already stepped forward to reveal the amount of coverage it has protecting its business units.
The Calgary-based company, which maintains a 36.74% interest in Syncrude, asserts that it is covered by US$1.65 billion worth of property and business interruption insurance, following a US$9 million deductible.
Syncrude is the primary business operation for Canadian Oil Sands, and typically boasts 207,700 barrels of output per day, according to the Wall Street Journal. This incident follows a series of obstacles for the oil producer, including unexpected equipment failure and drops in the price of crude oil.
Last week, Moody’s Investor Service downgraded Canadian Oil Sands’ credit rating to Baa2 following reports that it lost CAD$128 million, or 26 cents per share, in the second quarter of 2015.
