By Jessica Resnick-Ault
NEW YORK, May 20 (Reuters) - Out-of-control wildfires thathave consumed over a million acres of land in Canada's Albertaare costing oil companies as much as $50 million a day in lostproduction, according to analysts.
Alberta's oil producers curtailed production by May 5 asfires prompted the evacuation of Fort McMurray, a centralproduction hub. By May 9, more than 1 million barrels of dailyoil output had been halted.
"We estimate total daily pre-tax profit loss at $45 to $50million," Barclays analyst Paul Cheng said in an email toReuters.
For many companies, the shut-ins will translate directly tolower revenue in the second quarter, said Chris Feltin, ananalyst at Macquarie Capital in Calgary.
"The big thing here is that business interruption insuranceis unlikely to be claimed because the damage isn't direct totheir facilities, so this is something that is going to rollthrough on a revenue and cash-flow basis on the second quarter,"Feltin said.
There is no guarantee on how soon production will return tonormal.
Both more expensive light synthetic crude and cheaper heavybitumen from oil sands production have been shut in, with atotal of more than 1.2 million barrels of production offline,said Feltin. "That's a fair amount of production for both crudeslates that is offline."
Syncrude trades at a premium to benchmark U.S. crudefutures, while Western Canadian Select crude trades at adiscount, and bitumen is offered for even less.
The spot price of Syncrude is currently $51 a $52 a barrel,said Cheng. Syncrude for June delivery is tradingat $3.20 a barrel above the price of U.S. crude futures.
WCS is trading at about $37 to $38 a barrel, he said, andbitumen is currently at about $33.50 a barrel.
About 476 million bpd of synthetic crude production and 567million bpd of bitumen production are offline due to the fire,Cheng wrote on Friday. An additional 300,000 bpd of syntheticcrude production is offline due to maintenance.
Looking exclusively at the fire-induced shut-ins, that wouldindicate total losses are about $45 million. That number can becut slightly because Suncor's upgraders produce about 40percent synthetic light oil as well as a combination of lightsour crude and diesel fuel, Cheng said.
As a result, Suncor's overall realized price is lower thansyncrude by about 10 percent, Cheng said.
He estimated total daily pre-tax profit losses at $30million to $35 million for mining and upgrading operations, andanother loss of $15 million a day for oil produced using SAGD,an enhanced oil recovery technology for bitumen and heavy crude.
Suncor shares have lost 6 percent since the beginning ofMay.
(Reporting By Jessica Resnick-Ault; Editing by Chizu Nomiyama)
