Husky Sees Big Potential with Saleski Project, Part of Emerging Oil Sands Region

Posted: May. 25, 2011

Lauren Krugel

CALGARY – Husky Energy Inc. sees huge oilsands potential in an Alberta geologic formation that is believed to contain huge amounts of bitumen, but is technologically tricky to exploit.

“I think this is a story that’s going to develop quite a lot over the next year,” chief operating officer Robert Peabody said Wednesday of his company’s holdings in the Grosmont carbonates, southwest of the oilsands epicentre of Fort McMurray, Alta. “This really is the next wave of oilsands development.”

The Calgary-based company (TSX:HSE) estimates is Saleski lease has more than 32 billion barrels of bitumen in place. Lately, Husky has been drilling delineation wells to better understand the asset’s potential.

“This thing has huge amounts of bitumen in it,” Peabody told the UBS Oil and Gas Conference in Austin, Texas. “We’re determined to get it out.”

Last year, Alberta’s Energy Resources Conservation Board said it estimates the Grosmont carbonates contain 406 billion barrels of bitumen. Because the gooey oil is trapped in thick rock, it is tougher to get at than bitumen in the more developed Fort McMurray region.

Privately held oilsands producers Laricina Energy Ltd. and Osum Oilsands Corp. recently began producing oil from a pilot project near to where Husky has its Saleski holdings. Those companies are using steam-assisted gravity drainage to melt the tar-like bitumen and pipe it to the surface.

“I’m very optimistic,” said Peabody. “And I know our geologists are, our reservoir engineers are very optimistic that this is a very crackable sort of technology.”

Husky is controlled by Hong Kong billionaire Li Ka-Shing. It has operations in Western Canada, off Canada’s East Coast and in southeast Asia. It also has refineries, and a chain of fuel stations across Canada.

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