Harvest Operations has announced its decision to re-sanction and complete the construction and commissioning of its 10,000 bbl/d BlackGold SAGD oil sands project near Conklin, Alberta.
Harvest had previously suspended work in early 2015 dues to the drastic fall in oil prices. Major work at site has already commenced and will progress through the winter with the aim of commissioning wells and commencing steam injection in the second quarter of 2018, followed by electric submersible pump conversion in the third quarter.
Harvest, which is a subsidiary of Korea National Oil Corporation (“KNOC”), cites the stabilization of crude oil pricing and improved the operational and financial performance of Harvest’s conventional business as factors in its decision to move forward with BlackGold. With the support of KNOC, in 2017 Harvest was able to refinance $1.36 billion of maturing debt and last month raised an additional $250 million in financing, a portion of which will be used to fund the start-up of BlackGold. Harvest is presently reviewing other opportunities to raise non-debt sources of finance, the proceeds of which will be used to fund its conventional business and pay down debt.