Canadian regulator orders halt to Sunshine Oilsands operations
A Canadian regulator has ordered Sunshine Oilsands to suspend its operations, including wells, facilities and pipelines,in northern Alberta's oil sands regiondue 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.
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