GULF CANADA CORPORATION (GCC) says its board of directors has approved a return to Beaufort Sea exploration with a view to beginning seasonal production from the Amauligak structure In 1988 and full commercial production in the 1990s.
MARSHALL COHEN, chairman of Gulf and president of its parent, OLYMPIA & YORK ENTERPRISES LIMITED, said the authorization allows the company to resume drilling in the Beaufort this year to further define the limits and reserves of the Amauligak field.
In addition, the Gulf board has approved a complex series of steps that will eventually result in Gulf's upstream oil and gas business being reorganized as a publicly traded company and the phasing out of GCC as a holding company.
KEITH MCWALTER, chief executive officer of GCC's upstream business, said in a press release the drilling to date at Amauligak has confirmed that the structure, discovered in 1984, contains about 700 million bbls of crude half the total oil discovered so far in the Beaufort.
Seasonal development of the structure, he added, is the first step towards making the high quality Amauligak reserves available to Canada in the 1990s, when such supplies will be needed to replace diminishing conventional reserves. Last summer, the company produced and sold to markets in Japan, about 100,000 bbls of crude recovered during an extended production test of Amauligak.
"While the price of oil may continue to be volatile in the short term, we believe that the corner has been turned with the prospect of prices rebounding in the early 1990s", McWalter said in the news release.
Gulf has already identified two locations it would like to drill, McWalter told the Bulletin this morning, although it has not yet applied for licences.