Saskatchewan ranks high in oil and gas, but northwest still behind

This provincial map highlights oil deposits across the central east-west region of Saskatchewan

By Ben Ingram

The Fraser Institute recently ranked Saskatchewan as not only the best place in Canada to invest in oil and gas, but 11th in the world.

Here in the northwest however, the attitude is more cautious as oilsands exploration has lost  a lot of the momentum it enjoyed only a few short years ago.

Oilsands Quest (AMEX: BQI) holds the permit, renewed for another year on May 31, to explore the commercial viability of oilsands development centred around the Axe Lake discovery area in the northwest.

In 2008 the company’s stock reached levels of over $6 per share, when it began courting communities like La Loche and Clearwater River Dene Nation in hopes of building a cooperative relationship. The company’s stock has since fallen to levels below .35 cents.

“Their main purpose was consulting with us and working with us to have a positive human relationship with the community,” La Loche mayor Georgina Jolibois said. “Now it’s hard to say because we’re not dealing with the same group of people anymore.”

Oilsands Quest made a leadership transition, appointing Garth Wong as its new CEO and president this February. Wong was not available for comment, but Jolibois said she had not been contacted by the firm in quite some time.

“I believe if Chris Hopkins and the old group were still in place, we would be building on what we had reached on the agreement,” which included employment opportunities, infrastructure assistance and impact benefits, Jolibois said.

While La Loche came to an agreement in the form of a memorandum of understanding with the company in 2008, the self-described leader of Saskatchewan’s emerging oil sands industry received a different reception in Clearwater.

“We never signed anything,” chief Roy Cheecham of the Clearwater River Dene Nation said. “I don’t even remember the date that we last met.”

Cheecham would not go into specifics about what his community sought in an agreement with the company, but said it was generally along the lines of employment, investment opportunity, environmental concerns and a serious business contract.

“We do a whole lot of work out in Alberta and Saskatchewan in uranium and we’re now diversifying into potash,” he said. “It’s not that we can’t do things, but we’re not going to do things for nothing either.”

The Clearwater chief said that despite being “a long way” from an agreement with Oilsands Quest, he felt the onus to push forward rests with the company and the province.

“The door is always open but we will not sign an agreement that’s not beneficial to the long-term benefit of Clearwater and its residents,” he said.

While engagement with the local community has seemingly ground to a halt, the province said that enough work continues in the region to justify a renewal of the Oilsands Quest permit.

“They have some geology challenges as I understand it, coming up with the right extraction methods,” Saskatchewan Energy and Resources spokesman Bob Ellis said. “As far as the Oilsands Quest standing with us, they’re meeting their work commitments.”

Despite the downward trend of the company’s stock price, Ellis said that oilsand production in Saskatchewan is still in its infancy and that the provincial government has no reason to question the viability of the company in making it a reality.

“We’re cautiously optimistic that the endeavours of that company will ultimately prove that there are commercial quantities of oilsands in the province,” he said. “It’s a case of proving how much there is, how much of that is commercially recoverable.”

At present Oilsands Quest has said it is exploring “strategic alternatives” to increase the values of its shares, a strategy that may include new partnership or even a sale of the company.

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