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Testing new Arctic regime
The Canadian government is seeking a fresh start for oil and natural gas interest in the Arctic region as the industry awaits a change in northern jurisdiction over natural resources.
Against a recent backdrop of waning activity, federal Aboriginal Affairs and Northern Development Minister Bernard Valcourt has issued a call for nominations for frontier lands within the Inuvialuit Settlement Region in the Beaufort Sea and Mackenzie Delta areas of the Northwest Territories.
Depending on the response by the Sept. 24 deadline, Valcourt may launch a call for bids for exploration licenses in October.
It will be the last bidding round before responsibility for public lands, water and resource management in the NWT is scheduled to pass from the federal to the territorial government on April 1, 2014.
At that time, interests issued in the onshore will also be under the administration and control of the NWT government.
Apart from giving the NWT the chance to benefit directly from resource development, it is hoped the devolution will streamline approvals of projects.
Waning interest Interest in the Beaufort Sea-Mackenzie Delta has waned in recent years, with only a privately held United Kingdom company participating in a call for bids in the last five years.
Franklin Petroleum made a work commitment in the 2011-12 round of C$7.5 million for 100 percent control of 2.24 million acres.
Prior to that, BP Exploration submitted a record C$1.18 billion in work commitments in 2008 for a 553,000-acre Beaufort parcel and is working jointly with a partnership of Imperial Oil and ExxonMobil on exploration plans.
The joint venture is expected to file a project description and environmental impact statement with regulators later this year.
Imperial has said that a decision to proceed with an exploration drilling program in the Beaufort would require a “significant financial commitment” by the partners.
At best, industry observers believe that drilling is at least three years away.
The bleak outlook for the region was reinforced earlier this year when five exploration licenses in the Mackenzie Delta were surrendered by MGM Energy, a Calgary-based junior explorer that has been the only company to engage in drilling over a prolonged period.
—Gary Park
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