Monday, July 28, 2014
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Well-entrenched in oil sands, Fort McKay First Nation eyes even deeper ties

Yadullah Hussain

Financial Post

With annual revenues of about $700-million and as many as nine joint ventures focused on oil sands services, Fort McKay First Nation resembles more a sprawling Fort McMurray, Alta. business group than an aboriginal band. But the 700-member group is well-entrenched in the oil sands and considers the surrounding industry as its primary customer. The group is even looking to develop oil sands on its territory.

Our people need to be employed, need hope and need opportunities.

“I think we need to recognize there is a time for everything,” Chief Jim Boucher said from his office in Fort McMurray. “Our people need to be employed, need hope and need opportunities and here is an opportunity for us to get on board.”

Located along the banks of the Athabasca River in the Wood Buffalo municipality north of Fort McMurray, the band is at the heart of the oil sands development. With oil wells sprouting all around its territory, the band decided years ago that it would co-operate in the development of the world’s third-largest oil repository rather than stand opposed to it.

Which is not to say the group has not stared down mighty oil companies when it needed to. Fort McKay was in a two-year legal standoff with Brion Energy Ltd. after the two parties disagreed on the size of a buffer zone between the the group’s land northwest of Fort McMurray reserved for hunting and Brion’s 250,000-barrel-per-day Dover oil sands project.

In February, Fort McKay withdrew its complaint after the company addressed its environmental concerns. The project is of great financial significance to Athabasca Oil Corp., which owns Brion along with a PetroChina Co. Ltd. subsidiary. PetroChina had acquired 60% of the Dover project in 2010, with an agreement that allowed either side to trigger the sale of the remaining 40% after regulatory approvals. On Thursday the Alberta government signed off on the SAGD development, and the project file will now move to the Alberta Energy Regulator for a final decision.

The Dover deal offers hope that First Nations can find a way to co-exist with the hundreds of companies that have lined up to develop natural resources on their lands.

Gordon Nettleton, a partner at law firm McCarthy Tetrault LLP, said that while the deal came through litigation, it is an excellent step forward. “This deal is by no means an aberration.”

But Mr. Nettleton noted that while the project has been touted in the industry as an example of how First Nations can work together with the industry, the deal is not a “boiler plate” that can be applied to resolve other disputes.

Mr. Boucher said he is bound by a non-disclosure clause with Brion not to share commercial considerations, but says each deal would be different depending on the circumstance.

“I don’t think there is one template that fits all…. We are reaching out to other First Nations and are having discussions to see how we can take advantage of the opportunities and manage the risk associated with resource development.”

Lack of transparency means other First Nations or even the industry are none the wiser on resolving disputes.

Whatever Trevor

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