First Posted: 12/13/2007

LIMA — Husky Energy plans to spend close to $4 billion on capital expenses next year, and a good piece of that will be coming to Lima.The Canadian oil company on Thursday announced plans to spend $3.7 billion on capital expenditures in 2008. The money will be split between the company’s exploration and development in the Western Canadian oil sands and production at their current facilities, including the Lima refinery.According to a company release, the refined products group, which includes the Lima refinery, plans to spend about $300 million, with $160 million earmarked for maintenance and engineering in Lima. The remainder will be spent on maintenance of refining and ethanol assets and remodeling retail stations.A portion of the $160 million coming to Lima will be spent to pave the way for future upgrades, according to Tanis Thacker, manager of investor relations. Husky paid $1.9 billion for the Lima Refinery in July and officials have said since day one they intend to spend another $2 billion to $3 billion to upgrade the facility. The upgrades would allow the refinery to refine heavy crude of the tar-like bitumen drawn from the company's Canadian oil sands. They have yet to set a timeline for the expenditure, but Thursday’s announcement moves them closer."A portion of this, about $40 million, is for front end engineering that will allow us to upgrade existing engineering and determine cost and timeline," Thacker said.The $3.7 billion figure is a 28 percent increase over the company’s capital spending in 2007. President and Chief Executive Officer John C.S. Lau said the increase illustrates the company’s growth in North America and beyond."The company’s strategy is to focus on growth and high return projects offshore the east coast of Canada, Chine and Indonesia as well as enable the company to move forward with its integrated bitumen development at Sunrise (oil fields)," Lau said.Just last week Husky announced an agreement with British oil producer BP PLC to acquire a half-share in their Toledo refinery. As part of the agreement, BP will buy a half-share in the Sunrise field in Alberta, operated by Husky. Financial terms of the deal were not disclosed.Company officials said the Lima plant, which Husky purchased in July, will not be directly impacted by the decision. The company will continue with engineering and development plans to reposition the local refinery's 160,000 barrel per day refinery to process heavy oil.The company’s 2008 spending plan sets aside $300 million for Husky’s oil sands business, including $100 million for the Tucker development, and $160 million to develop the first phase of that Sunrise project. You can comment on this story at

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