Canadian regulator orders halt to Sunshine Oilsands operations (updated)

Sunshine Oilsands

19/11/2024 19:39

(Adds details on Sunshine Oilsands operations and AER order in
paragraphs 5-11)
       Nov 19 (Reuters) - A Canadian regulator has ordered
Sunshine Oilsands   2012.HK  to suspend its operations,
including wells, facilities and pipelines, in northern Alberta's
oil sands region due to continuous non-compliance with
environmental and public safety rules.
    The Nov. 14 order from the Alberta Energy Regulator (AER)
also demanded that Sunshine Oilsands post a security deposit of
C$6,091,318 ($4.36 million) to offset the estimated cost of
abandoning or reclaiming a well or facility.
    The company did not immediately respond to a request for
comment on Tuesday.
    "This order is to ensure that the sites licensed to Sunshine
Oilsands do not pose a risk to public safety or the
environment," the AER said on Monday, warning that
non-compliance could lead to further enforcement actions,
including an abandonment order.
    Sunshine Oilsands is headquartered in Calgary but listed in
Hong Kong, and holds approximately 1 million acres of oil sands,
petroleum and natural gas leases, according to documents on its
website.
        The company started producing bitumen from the West Ells
thermal oils sands project in 2017, but suspended operations in
2020 during the COVID-19 pandemic before resuming output in
April 2022.
  
        Production at West Ells, which has capacity of 5,000
barrels of oil equivalent per day (boepd), has averaged only 907
boepd in 2024, according to the AER.
  
        The AER highlighted a string of non-compliance issues,
including Sunshine Oilsands' power generation units at West Ells
being in disrepair, concerns about pipeline integrity and the
company falling behind on paying municipal taxes.
  
        In March the AER conducted an assessment of the company,
and found it was "highly financially distressed," according to
the regulatory order.
  
        Sunshine Oilsands recorded a net loss of C$22 million in
the first quarter of 2024, the most recent financial report
available on its website.
  
 ($1 = 1.3979 Canadian dollars)

 (Reporting by Anmol Choubey in Bengaluru and Nia Williams in
British Columbia; Editing by Richard Chang)
 ((anmol.choubey@thomsonreuters.com))