Husky Energy Signs Chinese Petroleum Contract

Husky Oil China Ltd. (Husky), one of the Husky Energy Inc. group of companies, announced today the signing of a petroleum contract for the joint development of the Wenchang 13-1 and 13-2 oil fields in the South China Sea with China National Offshore Oil Corporation (CNOOC).

Husky will hold a 40% working interest in these CNOOC-operated fields. Discovered in 1997, the Wenchang oil field development is located in the western Pearl River Mouth Basin, approximately 300 kilometres south of Hong Kong and some 136 kilometres east of Hainan Island at a water depth of 100 metres. Approval of the Overall Development Plan (ODP) by the relevant authorities has been received and development work has commenced.

James S. Blair, Senior Vice President of Husky Energy said that, "Oil production from Wenchang is targetted to begin in the first half of 2002 and have a peak production rate of 50,000 barrels of oil per day. Independent consultants have estimated recoverable reserves at approximately 100 million barrels for the two fields."

The Wenchang Project Team has approached international contractors to construct a floating production storage offloading vessel (FPSO) located between the two fields, with storage capacity of 1.2 million barrels. The development will incorporate two fixed platforms, one at each field, connected to the FPSO by pipelines.

"This exciting project will significantly enhance our production and earnings growth while providing a strong foundation for our growing portfolio of international assets" said John C.S. Lau, President and Chief Executive Officer of Husky Energy. "The Wenchang project fits well with our Canadian east coast developments from a technology and operating perspective, while adding substantial and profitable medium term production growth internationally."

Husky Energy Inc. is a Canadian-based integrated energy and energy- related company headquartered in Calgary, Alberta. The Company's operations include exploring for and developing crude oil and natural gas reserves; producing, purchasing, transporting and marketing crude oil, natural gas, natural gas liquids, and sulphur and petroleum coke; cogenerating electrical and thermal energy, upgrading and refining crude oil; and marketing refined petroleum products. Husky Energy is publicly traded on the Toronto Stock Exchange under the symbol HSE.


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