Reuters International

A man photographs burned out homes in the Abasand neighbourhood of Fort McMurray, Alberta, Canada, May 9, 2016 after wildfires forced the evacuation of the town. REUTERS/Chris Wattie

(reuters_tickers)

By Rod Nickel

FORT MCMURRAY, Alberta (Reuters) - Canadian officials on Monday got their first glimpse of the oil sands boomtown of Fort McMurray since a wildfire erupted and saw a "heartbreaking" number of destroyed homes but a largely intact downtown business area.

The fire that has ravaged some 161,000 hectares (395,000 acres) of Alberta moved far enough away from the evacuated town of 88,000 people to allow an official delegation led by the province's premier, Rachel Notley, to visit.

"Massive residential damage ... couldn't keep track of the unaffected streets. Large portions destroyed," Ward Councillor Tyran Ault said on Twitter, adding that the neighbourhood of Beacon Hill was in "heartbreaking" condition.

Other parts of the city were in better condition, he added, saying, "Downtown looks great. Business unaffected! Hospital too. Burnt trees and smouldering visible across the Clearwater (River) though."

Reporters on the tour viewed the charred rubble of Beacon Hill, where some 80 percent of the homes had been burned to the ground and the wreckage of blackened and melted cars remained on roads.

Still, Fire Chief Darby Allen told reporters that 85 percent of the buildings in Fort McMurray had survived the blaze.

That assessment came a few hours after insurance experts revised sharply downward their estimates of the cost of damage from the blaze, which began on May 1.

Canada's largest property and casualty insurer Intact Financial Corp <IFC.TO> expects to suffer losses ranging from C$130 million to C$160 million (£69.6 million - £85.6 million) from the wildfire. Intact used satellite imagery and geocoding technology to see if buildings were a total loss or partially destroyed.

Analysts said Intact's forecast implied overall industry losses of between C$1 billion and C$1.1 billion, much less than the earlier forecast of C$9 billion.

Prime Minister Justin Trudeau vowed a multi-year commitment by the national government to rebuild Fort McMurray after the most destructive Canadian wildfire in recent memory.

"We will support and invest in rebuilding Fort McMurray in a broad range of ways in the coming days, weeks, months and yes, years," he told reporters in Ottawa, but gave no details.

Fire officials said that cooler weather had slowed the fire's spread. But its course remained unpredictable, leading officials to order a midday evacuation of two hamlets south of Fort McMurray, home to a combined population of 530 people, at midday, then lift those orders less than an hour later.

RAIN NEEDED TO TAME 'BEAST'

Temperatures cooled on Monday, with a forecast high of 50 degrees Fahrenheit (10 degrees Celsius), down from Sunday's high of 63 degrees Fahrenheit (17 degrees Celsius).

The cool weather was expected to linger through Thursday, according to Environment Canada. Still, much of the province of Alberta in western Canada is tinder-box dry after a mild winter and warm spring.

"This beast is so big, we need rain to fix it," Public Safety Minister Ralph Goodale told reporters on Monday.

Government weather forecasts show the first possibility of rain on Wednesday with a 30 percent chance.

Officials said it was too early to know when the thousands of evacuees camped in nearby towns could go back to Fort McMurray, even if their homes were intact.

The city's gas has been turned off, its power grid is damaged and the water is undrinkable.

Fort McMurray is the centre of Canada's oil sands region. About half of its crude output, or 1 million barrels per day, has been taken offline, according to a Reuters estimate.

Statoil ASA <STL.OL> said it will suspend all production at its Leismer oil sands project in northern Alberta until midstream terminals needed to transport crude oil via pipeline reopen.

Its move followed shutdowns of Nexen Energy's Long Lake facility, Suncor Energy's <SU.TO> base plant operations, the Syncrude project and Conoco Phillips' Surmont project <COP.N>.

Nearly all of Fort McMurray's residents escaped the fire safely, although two teenagers died in a car crash during the evacuation.

(With additional reporting by David Ljunggren in Ottawa, Nia Williams in Calgary and Matt Schuffman, Ethan Lou and Allison Martell in Toronto; Writing by Scott Malone and Jeffrey Hodgson; Editing by Jeffrey Benkoe and Cynthia Osterman)

reuters_tickers

 Reuters International