Manitoba flood: Rain, flood waters shut down oil industry

Wet weather and flooding in Manitoba is hitting the oil industry hard.

Much of the province's oil patch is in the same area, inundated with water from heavy rain and overland flooding that hit during the Canada Day weekend.

​The ground is too wet to drill. The majority of wells were shut down during the flooding and roads are still too damaged for trucks transporting oil and equipment. 

"It's pretty sad. It's really sad because a lot of us in the area depend on it," said Kevin Dekeyser, who works in the oil-service industry preparing drill sites. 

According to the province, in the Waskada-Pierson area, 75 to 85 per cent of the wells were impacted by flooding. Tundra Oil and Gas had 90 per cent of their production shut down over the flood period and Corex Resources had 40 per cent.

• Manitoba flood to cost in excess of $200M, farm losses extra
• Wind warnings whipping up fears on Lake Manitoba
• Manitoba flooding: Cattle farmers waterlogged
• Flood of 2014 a $1B hit for Manitoba farmers: KAP

Because of a wet spring and then the Canada Day weekend flooding, Dekeyser is going on eight weeks without work or a paycheque.

"The stress is bad, really bad. You wake up in the morning and you're sick, literally sick," he said. "[I'm] thinking about selling stuff to carry on."

The stress is bad, really bad. You wake up in the morning and you're sick, literally sick.- Kevin Dekeyser

At Melita Resources, a Manitoba oil company, $6 million worth of rig equipment is collecting cobwebs and each well sitting idle costs the company $50,000 daily.

"Every minute we stand here, somebody's losing revenue, equipment is not working and it's costing; contractors aren't working. Every rain is another shutdown," said company president Greg Barrows. "So it's very significant."

​His company is operating at 15 per cent capacity and he says the losses will have a domino effect — from water haulers to EMS services that provide services to the locations, right down to agriculture producers losing revenue [from lost service leases].

"It's going to be some time before activity resumes to normal."

Exactly when production and drilling will resume depends on weather, and ground and road conditions, and that will all be evaluated on a case-by-case basis, according to the province.

It will take at least two months to calculate the financial impact the shutdown will have, provincial officials said.

Some in the oil business estimate the losses could be as much as $5 million per day for the province.

Flooding causes oil spills

Among those in the industry that are keeping busy are environmental remediation teams.

Jill Caldwell, co-owner of Goodlands Environmental Inc., said that between Manitoba and Saskatchewan, her company has dealt with at least three small oil spills.

"Over the last few days, we've discovered some spills that have happened during the flood event that nobody was able to find because the operators have been so cut off from lots of the wells and were unable to see what things were like underneath the water," she said.

Small spills aren't uncommon and teams typically respond within two hours, but high water and road closures meant it was days before teams could reach the spills, she said. 

"What happened was really a result of how quickly [the water] came," Caldwell said.

"It's really important that our infrastructure is maintained and that the roads are maintained and we can safely get where we need to get and we can get equipment where we need to get equipment to look after these sites."