ARCHIVED - Nominations Invited for the Mackenzie Delta/Beaufort Sea

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Bulletin
Volume 7, Number 2
February 2000

Call for Nominations Launched

The Minister of Indian Affairs and Northern Development is inviting industry to select exploration acreage over 105 million hectares (404 000 square miles) in the Mackenzie Delta, Beaufort Sea and western Arctic Islands. The Call for Nominations opens at 9:00 a.m. on February 18 and will remain open for six weeks, closing at 4:00 p.m. (Eastern Time) on March 31, 2000. Nominations will be considered for inclusion in a Call for Bids tentatively scheduled to be issued in late April or early May 2000.

In support of the 2000 Call for Nominations, environmental consultations were carried out with a number of federal and territorial departments and the Inuvialuit Game Council, to assist in identifying specific environmental sensitivities. As an additional area south of Shallow Bay is also being offered in this Call, the Inuvik and Aklavik Hunters and Trappers Committees were also consulted. As a result of our environmental consultations, the 2000 Call for Nominations area has been expanded to include an area south of Shallow Bay. A detailed map of the southwest portion of the Call area is indicated on the attached. Please refer to the Call for Nominations document or visit our website to obtain a map showing the full extent of the boundary of the call area.

Pipelines, Pipelines

The success of the last call for bids on four Mackenzie Delta land parcels unleashed speculation on a timetable for Mackenzie Delta gas development and a pipeline to the south. Only two years ago conventional wisdom held that development of these resources would likely occur after 2020. Change happens fast and last year's assumptions no longer hold. Prices have gone up, pipelining distances and costs have reduced and the ability of conventional supply regions to produce enough gas to meet demand is under question.

Last year, Poco Petroleums, Anderson Resources, Petro-Canada, and Burlington Resources moved to acquire new exploration licences in the Delta. These companies joined others with established rights in 53 existing Mackenzie Delta /Beaufort Sea discoveries. An emerging view is that gas (and possibly oil) will flow from this region within five to ten years, possibly sooner. There is already a major discovered resource in the Mackenzie Delta/Beaufort Sea region established by drilling in the 1970s and 1980s and large potential for further discoveries. According to recent estimates by the National Energy Board, the discovered and potential gas resource of the Mackenzie Delta and Valley (83 trillion cubic feet) equates to 37% of the remaining reserves and undiscovered resources of conventional natural gas in Alberta and BC. Perhaps more significant to companies is that more of the gas in the Mackenzie Delta is in large, productive pools with long production lives, rather than in the multitude of small rapidly depleted pools which remain to the explorer in the Western basin.

Neither should the oil potential of the Delta be ignored. Discovered and potential light oil resources in the Mackenzie Valley and Delta equate to 20% of the remaining resource in Alberta. The considerable oil resources and potential are likely to provide important synergies for gas development. Many of the gas pools are also rich in natural gas liquids which may be mixed in with oil production. An oil pipeline already runs to Norman Wells, more than halving the distance for an extension of the Norman Wells line to the Beaufort Sea.

Also in the mix is a huge Alaskan resource several times the magnitude of the Mackenzie Delta resource. While the Trans-Alaska Pipeline pumps oil from the North Slope to the Pacific market rim, the gas discovered in association with the oil has been stranded with no pipeline route to southern markets. With demand for gas in the United States (and Canada) increasing steadily, utilization of Arctic gas from both sides of the international border is increasingly seen as a commercially plausible component of future supply. Options abound and choices will fall to those with the major investments, the oil and gas companies and the peoples of north.

Reminder

The Call for Nominations in the Central Mackenzie Valley closes on February 29th at 4:00 Eastern Time. Please refer to the Call document for the draft terms and conditions for a subsequent Call for Bids.

For More Information on Calls for Nominations and/or Bids please contact us:

by phone: (819) 997-0877
or by fax: (819) 953-5828
or via e-mail to the Director:
Fortierm@ainc-inac.gc.ca
or via e-mail to Rights Issuance:
Desjardinsm@ainc-inac.gc.ca

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