UPI Energy Watch

By ANDREA R. MIHAILESCU, UPI Energy Correspondent  |  April 20, 2007 at 6:48 PM
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Husky Energy mulls buying U.S. refinery

Husky Energy Inc. said it is considering buying a U.S. refinery for one of its oil sands projects.

John Lau, chief executive of Husky Energy Inc., said the company is looking to increase the refining capacity of bitumen from its Sunrise project from 100,000 barrels per day to 200,000 bpd.

Husky may also offer a partnership in Sunrise, he said.

"We are quantifying the economic return to see which way would be better," Lau told reporters following the company's annual shareholders meeting in Calgary Thursday. Lau said the company will make a decision "before the end of the year."

According to the Toronto Star, Husky, which reported stronger-than-expected first-quarter results late Tuesday, is looking for alternative upgrade options for its Alberta oil sands production.

The Calgary-based firm, Canada's third-largest integrated oil and gas company, expects to produce 500,000 barrels of crude a day from its oil sands operations by 2020.

Bourgas-Alexandroupolis oil pipeline to start in May

Russia is considering ratifying the project for the construction of the Bourgas-Alexandroupolis oil pipeline in late April, said Semyon Vainshtok, president of Transneft.

Russia, Greece and Bulgaria secured an agreement to build the $1.36 billion, 174-mile-long oil pipeline in March. The pipeline will have an initial capacity of 15 million tons annually, and could grow to 35 million-50 million tons annually. The pipeline will be filled with oil delivered by tankers from Novorossiysk to Bourgas.

The project will be started immediately after its ratification by the parliaments of the member countries. The pipeline will allow the transportation of oil bypassing the busy straits of Bosporus and Dardanelles. According to Nikolai Seregin of Gazprom unit Gazpromneft, the oil industry will save $700 million-$750 million annually year after putting this pipeline into operation.

Russia's share in the project amounts to 51 percent and is managed by the consortium whose shares are divided among Transneft, Rosneft and Gazpromneft. Greece and Bulgaria each have 24.5 percent.

Chinese energy firms eye African oil projects

CNOOC, China's largest offshore oil company, and chemical trader Sinochem Corp. are preparing separate bids for U.S.-based Devon Energy Corp.'s West African oil and gas assets, in a deal valued at nearly $2 billion.

Other foreign bidders included London-based Tullow Oil, India's Oil and Natural Gas Corp., Canadian Addax Petroleum among others, according to media reports.

Devon said last January that production in 2007 could reach some 11 million barrels of oil.

Devon would provide detailed data on the assets to interested parties next week, and bids were expected in early July, John Richels, the company's president, said.

Devon, which is the largest U.S.-based independent natural gas producer, said it sold its Egyptian oil and gas business to Dana Petroleum of Britain for $375 million.


Closing oil prices, April 20, 3 p.m. London

Brent crude oil: $65.98

West Texas Intermediate crude oil: $63.26


(e-mail: AMihailescu@upi.com)

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