Canada spurs aboriginal investment in oil, gas projects with venture capital fund

Gary Park, PNA Canadian Correspondant

A new venture capital fund could eventually be the catalyst for up to C$150 million in First Nations investment in 300 oil and natural gas projects across Canada, said Indian Affairs Minister Robert Nault.

Announcing the creation of the C$10 million fund on July 15, he said the government hopes the modest start will over time allow First Nations businesses to secure a greater working interest in wells on their land and invest in larger-capital projects.

“I’m very confident that over the next 10 years, the fund will make a total investment of C$48.5 million in the aboriginal oil and gas sector,” he said.

The Canadian government contributed C$2 million to launch the fund, called the Indian Resource Council Sectoral Capital Fund, and the remaining C$8 million of seed capital came from private sector partners and First Nations groups.

The Indian Energy Corp. — a limited partnership incorporating the Indian Resource Council, the Federation of Saskatchewan Indian Nations and the Indian Business Corporation — will control the fund.

Nault said the fund will initially be directed at small-capital projects, allowing aboriginals to increase their working interest in existing wells.

But the long-range objective is to open the way for Native purchases of larger midstream projects.

It is also hoped the financing will lead to the creation of spinoff businesses to provide construction and maintenance of pipelines sand wells, drilling facility maintenance and transportation.

IRC president Roy Fox said aboriginals have not been major players in the petroleum industry because they have lacked access to capital and expertise and, because of strict government regulation, have been unable to reinvest royalties.

He said a board will choose projects worthy of investment, with advice from Calgary-based investment firm Enervest Group of Companies.