Offshore staff

CALGARY Canada -- Husky Energy has issued further details of a Heads of Agreement signed with CNOOC in December.

This sets out the principles of cooperation for funding and operation of the Liwan 3-1 deepwater gas field development in the South China Sea and related shallow water facilities.

Husky has a petroleum contract with CNOOC for block 29/26, covering the fiscal framework for exploration and development of oil and gas.

Under the Heads of Agreement, Husky will operate the deepwater portion of the project, which involves development drilling and completions, subsea equipment and controls, and subsea tiebacks to a shallow-water platform.

CNOOC will operate the shallow water portion of the project, including a platform, a 270-km (168-mi) subsea pipeline to shore, and an onshore gas processing plant. Husky is assigned a 49% interest in the deepwater development and 38.71% in the shallow water facilities.

The company expects to submit the Liwan development shortly. First gas is due in late 2013, ramping up through 2014.

Offshore Greenland, Husky is evaluating its 2D and 3D seismic inventory. It completed processing of 3D seismic for block 7 in late 2010, and is close to completing processing of block 5 data.

To the south, offshore Newfoundland, the company continues work on a staged development of the West White Rose reservoir.

Last August 2010, it won regulatory approval for a two well pilot-project to be drilled from existing infrastructure at White Rose. These wells will provide further information on the reservoir which will be used to refine planning for the full West White Rose development.

Husky secured a production license for the West White Rose pilot late last year and anticipates first production in mid-2011.

02/17/2011