Natives inherit oil riches

Land claim opens way to project run by Fort McKay First Nation

Gary Park

Petroleum News Calgary correspondent

A tiny aboriginal community in northeastern Alberta suddenly finds itself in control of up to 400 million barrels of heavy oil reserves, which it hopes to turn into the first Native-owned oil sands project.

Following 17 years of negotiations and a 92 percent ratification vote Oct. 23-24, the 550 members of the Fort McKay First Nation have accepted a land claim covering 24 square miles.

The land is about 30 miles north of the oil sands capital of Fort McMurray and close to the three multi-billion-dollar operations run by Syncrude Canada, Suncor Energy and Shell Canada.

As well, the community will receive a C$41 million cash payout over three years, with C$10,000 distributed to each member and the remaining C$33 million locked into a trust fund that will be used for future investment.

Chief Jim Boucher said the deal opens the way to “economic development and employment on the reserve.”

Oil sands project would tap reserves

“We’re pretty confident we will be able to overcome the risks with getting the project under way,” Boucher said.

But he has cautioned it could take four years to assemble management teams, secure funding and gain regulatory approvals.

Initially, a federal regulatory body will determine if a project is environmentally and technically feasible.

Fort McKay leaders are also exploring the possibility of engaging partners to mine the raw bitumen and assume the financial obligations of a project that could have an operating life of 25 to 30 years.

The first nation, once among the poorest Native communities in Canada, has already established a group of companies employing 275 people and supporting the entire oil sands industry with contracting, environmental, trucking and other services.