Husky Energy has something to bark about

Husky Energy has extended its record for getting major projects finished on time and on budget.

In fact, its first oil sands project ended up under budget, a rare if not unprecedented achievement at a time when overruns in the 50 percent range produce little more than a resigned shrug.

The Tucker operation in the Cold Lake area of northeastern Alberta beat its construction target of C$500 million, Chief Executive Officer John Lau announced, and is now on track to produce its first oil in November.

Peak production is expected to exceed 30,000 barrels per day within two years of start-up and Husky is counting on extracting 350 million barrels of bitumen over a 35-year lifespan.

Tucker has the added advantage of having ready access to Husky’s Cold Lake pipeline system and its heavy oil upgrader at Lloydminster.

But the challenges are not over. Bringing steam-injection projects on stream, then up to full capacity has tripped up experienced operators such as Petro-Canada, Suncor Energy and EnCana.

But Husky is confident enough to push ahead with its Sunrise oil sands project that is designed for staged construction to a peak 200,000 bpd over 40 years as it draws down a 3.2 billion barrel resource. The Tucker success comes on the heels of Husky’s hopes of receiving regulatory approval to raise output at its White Rose project offshore Newfoundland to 125,000 bpd, up 25 percent from its authorized level.

The 72.5 percent operator of White Rose, Husky said the field is currently pumping 110,000 bpd since the introduction of a fifth well in late June and expects to add a sixth well before the end of 2006.

—Gary Park