April 04, 2001 --- Vol. 7, No. 37April 2001

Hopes for new Mackenzie Delta gas turn soft

Canada's dreams of a major new gas discovery on the Mackenzie Delta are turning to mush as Petro-Canada and Anderson Exploration suspend drilling of a C$25 million well.

The two companies confirmed April 3 they will have to wait until next winter to resume work on their Kurk-L15 well, 125 kilometers north of Inuvik in the Northwest Territories.

Drilling reached a depth of 2,695 meters when Petro-Canada, as 60 percent owner, and Anderson decided to withdraw for the season before an ice road to the site starts melting.

J.C. Anderson, chairman of Anderson Exploration, said "we can't go further because if we leave the rig in there we are not even going to find the sucker next fall. It will sink out of sight."

The well marked the return of onshore exploration to the Delta after a 24-year hiatus. It was the only well planned for the Canadian Arctic in the current season, although four more are scheduled for next winter.

Petro-Canada postponed a planned start date of Feb. 1 by two weeks because the ice road wasn't thick enough to bear the weight of rig equipment being trucked to the lease.

Imperial Oil, Shell Canada and Gulf Canada logged discoveries of 6 trillion cubic feet in the area in the 1970s.

Native land claim could delay Alaska Highway pipeline

Yukon Dene are threatening to place a legal obstacle in the path of any Alaska Highway gas pipeline unless they see progress on land claims negotiations.

David Porter, head negotiator for the Kaska Dene, whose 3,000 members live along a 450-mile pipeline right-of-way, said the highway project could be delayed for years in the courts.

He said five lawsuits have been filed against the Yukon and Canadian governments. "We are well positioned on the legal front to pull the trigger if necessary," he said.

The Kaska Dene plan to take their warning to companies and financial institutions who would underwrite the pipeline asking them to pressure the governments to make a deal.

Porter said the energy industry appears to have been "deluded into believing that the pipeline right-of-way is all clear."

"We are prepared to take whatever steps -- be it litigation or otherwise -- to ensure that this pipeline doesn't proceed until we have satisfaction," he said.

Porter acknowledged the Dene will use the pipeline for leverage in their land claims, but insisted "we are not in any fashion out to deliberately undermine the Yukon."

An umbrella agreement with Yukon First Nations is in place, although seven of 14 claims are unresolved.

Yukon Premier Pat Duncan, who has made the negotiations a priority, also urged the Kaska Dene to "get out of court" and resume negotiations.

Northwest Territories Energy Minister Joe Hanley said the Kaska Dene stance may encourage North Slope and Mackenzie Delta producers to take another look at the "over-the-top" route from Alaska under the Beaufort Sea and down the Mackenzie Valley.

He said all aboriginal leaders in the NWT are squarely behind plans to develop Mackenzie Delta gas reserves and build a pipeline. "Industry is not very eager to get into big delays," he said.

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