Northern News Services
October 2007

The $16.2-billion Mackenzie Valley pipeline is still inching through the regulatory process much longer than expected, but there is still optimism in the Northern oil and gas industry.

Several companies - including Husky Energy's consortium, Talisman Energy and Devon Canada, Petro-Canada and MGM Energy Corporation - have already announced plans to drill wells this coming winter. There will likely be even more unveiled in the coming weeks.

"I think other people's pessimism creates opportunities for us. Hopefully we're right and they're wrong," said Henry Sykes, president of MGM. "We think there's an opportunity where there's uncertainty."

The opportunity of the North is undeniable. Oil reserves are pegged at more than 264 million cubic metres while natural gas under the ground and water is estimated at 2.3 trillion cubic metres. Add to these massive numbers the promise of gas hydrates around Mallik Bay.

Hydrates are a form of natural gas where the gas molecule is trapped in a frozen water crystal. One litre of gas hydrates yields 164 litres of natural gas. "The NWT would benefit as estimates suggest the volume of gas hydrates in the Mackenzie Delta may equal, or exceed, that of conventional gas resources," said Charles Dent, then NWT minister of Education, Culture, and Employment.

Northern benefits

For many Northern entrepreneurs who got into the business years ago to prepare for the pipeline, they've since found the preamble to the proposed mega project to be lucrative in its own right. Dave Warwick and April O'Brien, of Highland North, brought their helicopter company to Inuvik six years ago.

"Even though (the pipeline) hasn't come to fruition, we've found ourselves very busy," said Warwick. Like everyone else in the North, they're staying flexible about what they do before the real boom hits - as is the case with Floyd Diamond-C's Wolfe Trail Slashing.

This Fort Liard-based company recently had eight workers certified to fall trees for B.C. and Alberta's oil and gas industries.

Aurora College is doing its part to get Northerners ready, having trained some 200 students in the past year for careers in the oil and gas industry.

"We have developed strong relationships with the aboriginal groups in delivering relevant training opportunities for Northerners," said Rory Voudrach, co-ordinator of industrial oil and gas training at the Aurora Campus.

Glimpse of tomorrow

A whopping $613.4 million was committed towards exploration in the NWT during the 2007 bidding process. That represents some pretty big bets the Northern industry will soon find its feet in an even more meaningful way.

This amount included a record-setting $585 million pledge by two of the North's biggest petroleum players - Imperial Oil Resources Ventures and ExxonMobil Canada Properties - who are now 50-50 partners in an offshore area 120 km northwest of the Mackenzie Delta.

"This has exceeded our expectations and we are pleasantly surprised," said Industry, Tourism and Investment Minister Brendan Bell.

In the Deh Cho, where some development occurred years ago, communities are drawing closer to opening new lands to development. Representatives from Jean Marie River, Nahanni Butte, Fort Simpson, Fort Liard and Dehcho First Nations met in Trout Lake in September to discuss the possibility of opening the Arrowhead area up to petroleum exploration.

The elders in Jean Marie River successfully requested an area south of the community be freed up for oil and gas development. Jean Marie River Chief Stan Sanguez has been holding some exploratory talks with potentially interested companies, but he insists any development will happen according to the community's wishes.

"We have to be more careful than anything," he said. "There is no way to turn back now."

- with files from NNSL staff