Canada’s Syncrude oil sands facility has declared force majeure after a fire at the plant and told customers it will reduce production by about 20%, sources familiar with the matter said.
Syncrude is a joint venture majority-owned by Suncor Energy Inc , with minority stakes held by Imperial Oil Ltd and others. It can produce up to 360,000 barrels per day, upgrading thick bitumen to light oil.
“We’re working with the operator, Syncrude, to better understand the situation,” Suncor spokeswoman Sneh Seetal said in a statement, adding that there were no reports of injuries. Syncrude did not immediately respond to a request for comment.
Force majeure is a declaration that unforeseeable circumstances prevented a party from fulfilling a contract.
Canadian oil prices strengthened, with light synthetic crude for March delivery flipping from a discount to trade at a premium of $3.50 per barrel over West Texas Intermediate (WTI) on Thursday, due to the production cuts, market sources said.
Prices for April strengthened to settle at $3.10 over WTI on Thursday, wider than Wednesday’s settle of $2.10 over, according to NE2 Canada Inc.