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Colville hopes for rigs

10-year deal calls for exploration and royalties

Dave Sullivan
Northern News Services

Colville Lake (Jun 04/01) - Paramount Resources and Colville Lake-based Behdzi Ahda First Nation have signed an agreement that could result in exploratory gas rigs being moved in to the area next winter.

Neither side will reveal details of the 10-year concession agreement, which includes royalties paid to five Sahtu communities once gas starts flowing, but a Colville Lake band councillor says Paramount is already having a dramatic impact on the local economy.

"There was zero unemployment last winter" while Paramount carried out seismic work, and the company has been helping outside the agreement with funding and expertise for building a new skating rink and seniors' home, says Alvin Orliays.

Colville Lake, with a population of about 100, lies on the Arctic Circle 150 kilometres north of Norman Wells.

Paramount's president said last month that more seismic work will need to take place this summer before the company knows for sure if rigs can be sent in for the winter.

Clay Riddell said he doesn't expect delays with the regulatory regime in the Colville Lake area, which has some different rules than the southern part of the territories.

In January, the company was forced to shelve a $65-million gas drilling program near Fort Liard because of delays with environmental assessments submitted to the Mackenzie Valley Land and Water Board.

The board was concerned about sour gas flaring, but Paramount plans to go back to Liard this winter.

Riddell said gas under Colville Lake is "not very sour" and Paramount's regulatory affairs spokesperson Shirley Maskaant said the Sahtu Environmental Review Board should respond to permit applications this month.

She said Paramount has not yet submitted any applications, but decisions will have to be made by July if rigs are to arrive in the Beaufort Delta by barge. Delays past then won't necessarily mean a problem because winter roads could still be used later for rig moves, Maskaant said.

Depending on the results of seismic studies already completed, the company may decide on another winter of seismic work before moving rigs in. In the concession agreement Paramount must drill two wells, but Riddell said there are no urgent deadlines to be met.

The agreement covers 60,000 hectares of land. Last July, Paramount also received a federal exploration licence covering an additional 120,496 hectares east of Colville Lake