Released on February 19, 1998
The Province of Saskatchewan today announced the sale of its50 per cent interest in the Bi-Provincial Upgrader (BPU) in
Lloydminster to Husky Oil Operations Ltd. (Husky) for $310 million.
The deal was jointly announced by Premier Roy Romanow, Deputy Premier
and Crown Investments Corporation Minister Dwain Lingenfelter and
Husky Oil Chief Executive Officer John C.S. Lau.
"We have recovered every dollar that Saskatchewan put into this
upgrader over the years," Romanow said. "The proceeds of this sale
will be used to reduce the province's debt, saving about $20 million a
year in interest payments."
"Husky has had a very satisfactory joint-venture relationship with our
partner, the government of Saskatchewan," Lau said. "This purchase
reaffirms Husky's long-term commitment to the Upgrader and to the
Lloydminster area and gives our corporation flexibility as we plan for
the future development of our heavy oil assets."
Lingenfelter outlined some key commitments Husky has made as part of
the agreement:
Husky will assume obligations of CIC under agreements with
Alberta and Canada including the upside interest agreements.
Husky will get the BPU's heavy oil feedstock and natural gas
in equal amounts from Saskatchewan and Alberta as long as
supplies are available at market prices.
Husky will assume liabilities and obligations of CIC
regarding the BPU including environmental liabilities.
Husky will continue with the current feasibility studies to
determine if it is commercially viable to expand the
facility.
"We are pleased to sell Saskatchewan's interest to a company
which has been a good partner in the BPU and has a long-standing
commitment to the development of the oil industry in the
Lloydminster area," Lingenfelter said.
Husky and CIC Industrial Interests Inc. (a wholly owned
subsidiary of the Crown Investments Corporation of Saskatchewan)
had been equal joint-venture owners in the facility since
February 1995.
The Bi-Provincial Upgrader is located in Lloydminster,
Saskatchewan and has been in operation for over five years.
The facility processes heavy oil into high quality, low sulphur
synthetic crude ready to be refined into transportation fuels.
During 1997, the Upgrader produced an average of 53,000 barrels
of synthetic crude daily. The facility directly employs just over
300 people.
Husky Oil Operations Ltd. is a wholly owned subsidiary of Husky
Oil Ltd. Husky Oil Ltd. is a Canadian-based integrated oil and
gas company headquartered in Calgary, Alberta.
Husky Oil's operations include the exploration for and
development of crude oil and natural gas, as well as the
production, purchase, transportation, upgrading, refining and
marketing of crude oil, natural gas, natural gas liquids, sulphur
and petroleum coke, and the marketing of refined petroleum
products. Husky Oil Ltd. is a privately held company, controlled
by the Hong Kong-based Li Ka-Shing Group of companies.
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For more information, contact:
Ted Boyle Laurel Nichol
Crown Investments Corporation Husky Oil Ltd.
Regina Calgary
Phone: (306) 787-9039 Phone: (403) 298-7188