BP Declares Force Majeure on Canadian Crude Amid Wildfire


NEW YORK, May 6 (Reuters) - BP PLC will not be able to deliver on some contracts for Canadian crude, two trading sources familiar with the matter said on Friday, the latest sign that output cuts due to the wildfires are curbing supplies from the vast oilsands region.

The oil major's Canadian unit declared a "force majeure," saying several grades of Canadian crude oil would not be as readily available for its customers through the rest of May, according to the sources.

A force majeure event is an unforeseen event that prevents a party from fulfilling a contract. BP did not immediately comment on the declaration.

The force majeure comes after the fire this week forced the evacuation of 88,000 people from Fort McMurray, located in the heartland of Alberta's energy region, and resulted in the shutdown of about 1 million barrels per day in production, nearly half of Canada's oilsands output.

At least 10 oilsands operators have reduced production as a result of the evacuations and part of emergency measures, and has snarled delivery of oil via rail, pipeline and highways.

BP produces oil in Canada via a partnership with Husky Energy Inc.

Husky said earlier this week it cut production at its Sunrise oil sands project to 10,000 bpd from 30,000 bpd after a pipeline that supplies the project with diluent was shut down.

BP also buys oil from other producers to sell to refiners or other traders.

(Reporting by Catherine Ngai; Editing by Marguerita Choy)


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