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Deh Cho misses deadline Won’t join pipeline group, demands access to agreements; Fort Liard in question By Gary Park For Petroleum News
The Deh Cho First Nations have chosen not join other aboriginal communities by taking an equity stake in the Mackenzie Gas Project, pushing their region closer to an internal division.
By failing to meet a July 31 deadline to become a full-fledged partner in the Aboriginal Pipeline Group, which hopes to own one-third of the Mackenzie pipeline, the Deh Cho pushed their dealings with APG to the breaking point.
In their own statement, issued Aug. 2, Deh Cho Grand Chief Herb Norwegian accused APG Chairman Fred Carmichael of staging an ongoing effort to deny the Deh Cho a chance to conduct a “thorough review of the main commercial documents” associated with aboriginal participation in the pipeline.
Norwegian said the current demands on the Deh Cho to “make a crucial decision without being allowed to review relevant documents” are a reminder of a “long and tragic history of document-related tricks affecting our peoples’ jurisdiction over our lands.”
“That’s not the way we do business here in the Deh Cho,” he told reporters. “We need to see the details. We need to see the fine print.”
He said APG is withholding financial information critical to deciding whether his people should become partners. Deh Cho offered 34 percent interest The Deh Cho, whose territory occupies more than 40 percent of the pipeline right of way, have been offered a 34 percent interest in APG, which intends to pay dividends to the Inuvialuit, Gwich’in, Sahtu and Deh Cho regions based on the volume of natural gas that will be carried by the Mackenzie pipeline.
APG President Bob Reid said the failure of the Deh Cho to join the aboriginal consortium by July 31 was “too bad because the APG is a great opportunity.”
APG has indicated it is now ready to offer the same deal to some of the 10 communities which fall under the Deh Cho umbrella and have expressed an joining the APG independently.
Norwegian said those communities should tread carefully.
“If communities are just going to go ahead and make a decision based on a very general overview with some schmooz artist coming in and telling them that this is a good deal, well they’re going to be bankrupt right from the outset,” he said. Fort Liard a breakaway candidate One of the breakaway candidates is the Fort Liard community, a strong supporter of resource development.
Exploration near Fort Liard, in the lower Northwest Territories, started about 50 years ago and had only limited success until 1999 when a Chevron Canada-led partnership posted two of the largest gas discoveries in Canada’s drilling history.
The K-29 well had flow rates that placed it among the top five of the 74,000 wells drilled to that time across Canada.
Under Chief Harry Deneron, leader of Fort Liard’s Acho Dene Koe, the community of about 550 took the unusual step at the time of putting its land claim on hold to open the door to further exploration.
Deneron is still the only chief within the Deh Cho who publicly endorses the Mackenzie pipeline and challenges the stance taken by Norwegian, although others are reportedly concerned about Norwegian’s hard line.
Now Deneron is spearheading an effort to reactivate drilling in the Fort Liard area, ending a two-year lull because no fresh exploration lands have been made available. Two exploration parcels to be offered To advance that objective, the federal department of Indian and Northern Affairs plans to invite bids later in August for two exploration parcels and expects to award permits in January.
The plan is to reverse the rapid decline in production at the Fort Liard wells by holding regular bidding rounds along the lines of those offered in the Mackenzie Delta and Central Mackenzie Valley.
The K-29 and M-25 wells achieved raw gas production in 2000 of 75 million cubic feet per day, connecting with the pipeline network in northeastern British Columbia, but by 2005 output was only 17 percent of that peak and declined to just 7 percent in the final quarter of 2005.
One of the junior players, Purcell Energy, has talked about selling its “volatile and unpredictable” gas operations at Fort Liard.
In 2004, Anadarko, which spent C$150 million over three years and made undisclosed gas discoveries that it has described as encouraging, deferred construction of a C$250 million gas gathering system pending solid indications from the Canadian government and Deh Cho on a new rights issuance.
In 2003, Anadarko reached an agreement with the Deh Cho to explore some traditional aboriginal lands and start a cycle for issuing oil and gas licenses.
However, for reasons that were never made clear, progress was halted and now Anadarko has those assets on the block along with the rest of its Canadian interests as it prepares to pull out of Canada.
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