By an OGJ Online Correspondent
CALGARY, May 15 -- Husky Energy Inc. plans to increase exploration off Canada's East Coast as part of a plan to double overall company production to 500,000 boe/d by 2005.
Husky executives told the company's annual meeting a decision whether to proceed with the $1.8 billion (Can.) White Rose oil field project off Newfoundland will be made in September. A decision was scheduled for midyear, but Husky and partner Petro-Canada will decide after receiving an engineering report on cost of a production platform.
Husky has a 72.5% interest in White Rose and Petro-Canada holds the rest.
White Rose has reserves of 200 to 250 million bbl of crude, about half the size of the Terra Nova field in the same region, which is under development by Petro-Canada.
White Rose would produce 100,000 b/d by 2004, if developed. There is also an estimated 2.5 tcf of gas. Husky has interests in 13 significant discovery areas in the region, and is considering development of the natural gas potential.
Husky CEO John Lau noted Husky has been involved in the East Coast for 20 years and it would be wrong to look at the development of White Rose, a single project, as determining the future of the company.
"If you look at our (production) profile of 5-year development from today, the East Coast contributes less than 20% of the whole group's exposure," Lau said.
Husky Vice-Pres. Jamie Blair said the East Coast potential can be compared to the Canadian and US Arctic and the deepwater Gulf of Mexico as frontier reserves.
Husky also said it is delaying expansion of its heavy oil upgrader at Lloydminster on the Alberta-Saskatchewan border, but the final project will be larger in scale.
The company said the tight Alberta labor market was the reason for not proceeding with a $500 million expansion that was due to start in 1999. It was postponed originally while Husky considered new technology.
A decision be made by 2003 on a $1 billion-$1.2 billion project to double upgrader capacity to 150,000 b/d. Lau said Husky is anticipates lower labor demand after other major Alberta projects are completed.
The meeting was the first in 13 years for Husky, which went public after a takeover in 2000 of Renaissance Energy Ltd. The company is 70% owned by Hong Kong billionaire Li Ka-Shing and his family.