EnCana Corp. has bagged a big “Buzzard” that’s at home in the water.

EnCana (U.K.) Limited received approval last week from the U.K. Department of Trade and Industry to develop the Buzzard offshore oil field – the largest field to be discovered in the North Sea in a decade. Its recoverable reserves are estimated to be more than 400 million barrels of oil.

Gwyn Morgan, EnCana’s president and CEO, says the first oil production from the $2-billion US development is planned for 2006. By 2007, Buzzard is expected to add about 80,000 barrels of oil per day to EnCana’s worldwide oil production of about 252,000 barrels a day.

Buzzard will perch in about 100 metres of water, approximately 100 kilometres northeast of Aberdeen, Scotland.

It will consist of three bridge-linked steel platforms supporting facilities for drilling, production and living quarters.

The crude oil will be transported to the mainland through a pipeline tie-in to the nearby Forties pipeline system, with the natural gas flowing to market via the Frigg pipeline.

Buzzard is expected to be a hub for several existing and potential discoveries in the field, which is operated by EnCana with its 43-per-cent interest in conjunction with Intrepid Energy North Sea Limited (30 per cent), BG Group (22 per cent), and Edinburgh Oil and Gas (five per cent).

EnCana’s Buzzard is part of a growing Canadian flock in the North Sea. Talisman Energy Inc., Canadian Natural Resources Limited and Petro-Canada are also hunting the estimated 13.6 billion to 47.6 billion barrels of oil and natural gas remaining on the U.K. continental shelf.

CHINA BECKONS

Husky Energy Inc. is also exploring foreign waters to add to its oil and gas production.

The company recently signed an exploration contract with the China National Offshore Oil Corp. (CNOOC) as part of its strategy to expand operations into the East China Sea.

Husky will be looking for natural gas in about 100 metres of water, in a 4,835-square-kilometre area located 350 km east of Shanghai. The company is required to drill one exploration well to 2,500 metres during the first three years of the contract.

Husky also holds four exploration blocks encompassing more than 15,000 square kilometres in the South China Sea, where it plans to drill an exploratory well in early 2004.

The company also has a working interest, in partnership with the CNOOC, in the Wenchang offshore oilfields, from which Husky expects about 23,000 barrels of oil per day in 2003.

BACK TO THE SALT MINES

Enbridge Inc. and oilfield services firm CCS Inc. have opened their jointly owned $70-million underground crude-oil storage facility at Hardisty, about 35 km southwest of Wainwright.

The giant storage locker was built from four underground salt caverns, each holding 600,000 to 900,000 barrels of oil.

Crude oil from a number of sources in Western Canada will be stored at the facility, for eventual delivery to market through the Enbridge terminal at Hardisty.

Production of crude oil from the oilsands is expected to grow to record levels by the end of this decade. The storage caverns will give operators flexibility to take advantage of the best market prices for their product.

Being near the Hardisty terminal places the caverns strategically in line with feeder pipelines from the Athabasca region, as well as Enbridge’s main line system that connects Western Canadian crude to markets in Eastern Canada and the U.S. Midwest.

Wonder if they have room to store all my old LPs?

GREEN ACRES

Think Alberta is all oil, natural gas and coal when it comes to energy? Better think again.

Alberta leads the country in renewable “green” electricity-generation capacity, according to a new report by the Pembina Institute for Appropriate Development.

As of the end of last year, 36 per cent of Canada’s green power capacity was located in Alberta, says the report. That compares with 27 per cent capacity in Ontario, 19 per cent in Quebec and 14 per cent in British Columbia.

But we Albertans needn’t rush to claim the renewable energy high ground.

Pembina’s report notes electrical production by green-power facilities amounted to just a fraction – 1.6 per cent – of the total electricity produced in Alberta. Still, that’s more than three times the average 0.5 per cent for Canada as a whole.

Canada’s green-power sector is growing, but is still very small compared with several other industrialized countries, mainly due to a lack of supportive federal and provincial government policies, says the report, which was funded by Environment Canada.

Across Canada, green-power generation at the end of 2002 was dominated by wind facilities (43 per cent), hydro (about 36 per cent) and biomass (about 20 per cent).

Green-power programs reduced the country’s greenhouse gas emissions in 2002 by about one million tonnes, the report says.

Canada, however, will have to cut an estimated 240 million tonnes of greenhouse gases if it wants to meet its target under the Kyoto accord.

It’s going to take many more wind turbines, hydroelectric generators and biomass plants to help close that gap.

RECENT ACTION

Big mergers and acquisitions in the oilpatch have become few and far between. But that hasn’t stopped the wheeling and dealing, especially among the junior players. Here’s some recent action:

Enerplus Resources Fund has bought privately held Ice Energy Ltd. for $123 million, giving Enerplus a foothold in the Shackleton area of western Saskatchewan – the province’s largest natural gas field.

Promax Energy Inc. is buying all of EOG Resources Canada Inc.’s oil and gas assets for $60 million, subject to court approval.

StarPoint Energy Ltd. is acquiring, in a share exchange, all of the issued and outstanding shares of Upton Resources Inc. Bonavista Energy Trust is snapping up all the Canadian oil and natural gas assets in Alberta from a privately held, U.S.-controlled corporation (as yet unidentified) for about $275 million, which includes 10.4 million equivalent trust units of Bonavista and $100 million in cash.

Wrangler West Energy Corp. is making an offer, via a share exchange, to acquire all of the issued and outstanding shares of Replay Resources Ltd. Rhodes Resources Corp. and Terrapet Energy Corp. plan to merge to form a new company, Terra Energy Corp., which will then have about 1,100 barrels of oil equivalent per day of production.

All the activity underlines analysts’ reports that junior firms have not only been the biggest sellers of assets so far this year, they’ve also been among the biggest buyers.