The Province of Saskatchewan today announced the sale of its 50 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.

Ted Boyle
Crown Investments Corporation
Regina
Phone: (306) 787-9039

Laurel Nichol
Husky Oil Ltd.
Calgary
Phone: (403) 298-7188