Canada's Harvest drilling finds 5.9 mln bbls oil reserve - KNOC

SEOUL - State-run Korea National Oil Corp (KNOC) said on Sunday its loss-making subsidiary Harvest Operations had found at least 5.9 million barrels of crude oil in a Canadian well where it began drilling earlier this month.

The oil well, now worth US$470 million (S$590.34 million), is in the northwestern Canadian mining area of Royce, KNOC said in a statement. KNOC fully owns Harvest Operations.

The well is producing the equivalent of 800 barrels per day of combined oil and gas, the statement said. Another 30 or 40 drilling sites could be developed, the statement said.

That included Harvest-owned sites in the Deep Basin and Loon regions, the statement said.

KNOC also plans to invest heavily in shale gas in the Muskwa region, together with oil sand in the Black Gold mine as part of Harvest's non-conventional crude oil sector.

Last week, the state-run oil company announced it was considering whether to sell "non-core parts" of Harvest.

KNOC bought the Canadian oil and gas trust for US$1.7 billion in 2009. Harvest reported a net loss of C$720 million in 2012.

Harvest's upstream sector recorded operating profits of C$3 million (US$2.91 million) last year, despite production failures caused by natural disasters.