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Harvest targets oil sands project
By GARY PARK For Petroleum News
Harvest Operations, a unit of state-owned Korea National Oil Corp., has approved a modest increase in its capital budget for 2013, allocating 73 percent to the first phase of its planned startup oil sands project in Alberta.
The company announced spending of C$733 million, compared with its 2012 program of C$645 million which was scaled back from an original C$770 million.
Harvest has earmarked C$315 million for its BlackGold project to construct a 10,000-barrels-per-day Phase 1 central processing facility, targeting first steam and oil production in 2014.
The company said it is counting on receiving approval from the Alberta Energy Resources Conservation Board in 2013 for the 20,000 bpd Phase 2.
Of next year’s budget C$615 million is assigned to upstream oil and gas operations and C$118 million to the company’s refining and marketing business.
Drilling 61% of budget With 61 percent of the budget allocated to drilling activities, Harvest said it plans to drill 76 gross wells, including 12 injection wells within the Hay River area of the Northwest Territories.
The drilling program will focus on crude oil in Western Canada with the exception of some high-volume, liquids-rich natural gas wells in the Deep basin.
Production for all of 2013 is expected to average 53,500 barrels of oil equivalent per day, reflecting recent dispositions and the cutback in spending in 2012.
The company’s refinery in Newfoundland was scheduled for a maintenance shutdown of 35 days in December, while throughput for 2013 is forecast to average 93,500 bpd, with operating costs and purchased energy costs amounting to about C$7 per barrel.
Harvest said it has closed the sale of some non-core assets in various locations throughout Alberta and Saskatchewan for cash proceeds of just over C$78.5 million. The assets involve current net sales of about 1,290 boe per day, with the proceeds being used to reduce debt.
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