NEWS BULLETIN

July 31, 2001 --- Vol. 7, No. 91July 2001

NWT energy minister, Imperial Oil criticize

Houston-based Arctic Resources, the sole promoter of an "over-the-top" gas pipeline, has been accused of putting Arctic development at risk by dangling the prospect of 100 percent aboriginal ownership of a pipeline.

Northwest Territories Energy Minister Joe Handley said the company, through its Canadian subsidiary, Arctigas Resources, is causing "confusion and doubt" by suggesting Natives can own a debt-financed pipeline without investing a cent.

"Some people are being attracted by a good presentation and are not sitting back and seeing the reality of it," he said. "I have a very, very difficult time being able to see how this would be viable and if benefit to aboriginal people."

A spokesman for Imperial Oil, the lead partner in the Mackenzie Delta gas producers consortium, said no producers in either the Delta or the North Slope have shown any interest in joining the Arctigas proposal. He said the notion of running a subsea pipeline across the Beaufort would be a "hugely risky venture full of engineering unknowns."

Because Arctigas plans to transfer all of the risk from the pipeline owners to producers it won't get any support from producers, who feel they must be able to control their costs and have assured access to the line.

However, Arctigas Resources president Harvie Andre said backing from the Delta producers is not essential because "there are a whole group of other companies who are exploring up there ... we're quite confident our project could be financed."

Arctigas is now sidestepping aboriginal political leaders and funding the Ernie McDonald Land Corp., one of about a dozen business organizations which run aboriginal land claims along the pipeline right-of-way, to boost its lobbying efforts. Larry Tourangeau, president of Ernie McDonald Land, said an intensive effort is underway to make more Native communities aware of the Arctigas proposal.

Andersen unveils $18 million “state-of-the-art” Arctic rig

The wraps have come off Akita Equtak Rig. 63, an C$18 million, state-of-the-art Arctic drilling rig which will underpin Anderson Exploration's four-year drilling program in the Mackenzie Delta and Beaufort Sea.

The rig, weighing in at 3 million pounds, is a joint venture by Akita Drilling and the Inuvialuit Development Corp., the business arm of the Inuvialuit Regional Corp.

Akita Vice President Ron Hunt said the rig is completely self-sufficient for Arctic conditions and has a smaller footprint than regular rigs so it can work on ice or gravel pads.

IRC Chair and Chief Executive Officer Nellie Cournoyea said that deciding to invest in Arctic resource development has been a difficult choice for aboriginal people. But, because of commitments from Akita, Anderson Exploration and other companies, the Inuvialuit "feel a true responsibility that we make this development a success."

J.C. Anderson, chairman of Anderson Exploration, said a wide range of people stand to benefit financially from the joint Anderson/Petro-Canada exploration program. However, he said: "We have no assurance that we will benefit from our efforts, since we are involved in exploration in its purest sense.

"It takes an unusual amount of courage to be an explorer and to lay your ideas and capital on the line with no assurance of a return, although we are confident that we will be successful,” Anderson said.

Anderson, the largest holder of Delta-Beaufort exploration lands at 1.6 million acres, has allotted C$100 million to fund projects in the Northwest Territories this year and "we'll be spending much more than that next year, but we haven't arrived at a number yet."

He said the new rig will drill two exploration wells for Anderson in the Arctic this winter. The company will also begin offshore seismic studies of the shallow coastal waters of the Beaufort, concentrating on water about 50 feet deep.


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