Sunshine Oilsands operations halted by Canadian regulator
Sunshine Oilsands has been ordered by a Canadian regulator to suspend all operations in the oil sands area of northern Alberta, including its wells, pipelines and facilities, due to a continuous failure to comply with environmental and safety regulations.
The Alberta Energy Regulator's (AER) order of Nov. 14, also required Sunshine Oilsands to post a C$6,091,318 (4.36 million dollars) security deposit in order to offset the estimated costs of abandoning or recovering a well or an facility.
Tuesday, the company didn't immediately respond to an inquiry for comment.
The AER stated on Monday that "this order is intended to ensure that sites licensed to Sunshine Oilsands don't pose a threat to the public safety or environment." They warned that non-compliance with the order could result in further enforcement actions including an abandonment.
Sunshine Oilsands has its headquarters in Calgary, but is listed in Hong Kong. It holds about 1 million acres in oil sands leases and petroleum and natural gas, according to the documents on their website.
The company began producing bitumen in 2017 from the West Ells Thermal Oil Sands Project, but suspended operations during the COVID-19 Pandemic in 2020. Production resumed in April 2022.
AER reports that the average production at West Ells in 2024 was only 907 barrels of equivalent oil per day (boepd), despite its capacity of 5,000 boepd.
The AER raised a number of issues with non-compliance, such as Sunshine Oilsands power generation units in West Ells, which were in a state of disrepair. There was also concern about the integrity of pipelines and that the company had fallen behind on municipal taxes.
According to the regulatory order, the AER assessed the company in March and determined that it was "highly financial distressed".
Sunshine Oilsands' most recent financial report, available on the company website, shows a loss of C$22m in the first quarter 2024. (1 Canadian dollar = 1.3979 dollars) (Reporting from Anmol Choubey and Nia William in British Columbia, with editing by Richard Chang).
(source: Reuters)
