Heavy Oil

Husky pioneered the production of heavy oil in Western Canada and the resource continues to play a significant role in its operations.

The majority of Husky's heavy oil assets are located in the Lloydminster region of Alberta and Saskatchewan, where it holds approximately two million acres. The Company owns and operates 19 oil-treating facilities tied into its pipeline system in the Lloydminster area.

The Company's heavy oil reserves are concentrated in the relatively shallow oil fields of Pikes Peak, Edam, Tangleflags, Celtic, Bolney, Westhazel, Big Gully, Hillmond, Mervin, Marwayne, Lashburn, Gully Lake, Rush Lake, Wildmere and Wainwright.

With production of approximately 100,000 barrels of oil per day, Husky is an industry leader in Western Canada heavy oil. The heavy oil upgrader and asphalt refinery create valuable synergies, while advances in enhanced oil recovery (EOR) technologies are further unlocking the potential of this resource.

Over the past six decades, Husky has produced more than 775 million barrels of heavy oil in the Lloydminster area. This represents only about seven percent of the oil under Husky leases in the area.

Husky uses a number of technologies to recovery heavy oil, including "cold" production, thermal, horizontal drilling and high-volume lift.

Approximately 80 percent of Husky's heavy oil is currently recovered through cold heavy oil production with sand (CHOPS). This method produces sand from the formation along with the oil, increasing productivity by creating a path of least resistance for the oil to flow to the wellbore. The resulting production rates are much higher than would be expected in a conventional reservoir setting. This process has been a successful foundation for the growth of heavy oil production in the region since the mid-1990s. Husky continues to build on its expertise in this area to optimize production and costs.

Husky recovers the remaining 20 percent of its heavy oil using thermal recovery techniques such as steam-assisted gravity drainage (SAGD). These methods lower the viscosity of heavy oil and make it easier to extract. The percentage of heavy oil produced from thermal projects is expected to increase substantially in the future.

Notable steam projects include Pikes Peak, Bolney, Celtic, Lashburn and Tucker.

Both cold and thermal production methods exploit reservoir characteristics unique to the area's heavy oil fields.

One of the most significant innovations in heavy oil is the extensive use of horizontal wells as a means of targeting pockets of existing oil in known regions. Drilling crews can pinpoint a location within a metre, making it more efficient to find and extract pockets of thinner beds of oil.

Husky is continuing to study alternative recovery processes that offer potential for significant incremental production from its existing heavy oil resource base.