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NORTHWEST TERRITORIES
The recent call for bids on Northwest Territories land parcels has ended with oil and gas companies committing more than $500 million to secure exploration licences in the Central Mackenzie Valley.

The Department of Aboriginal Affairs and Northern Development accepted bids for 11 parcels of land in the Sahtu region, for a total work commitment of $534 million from five major oil and gas companies.

"We are pleased with the bidding results," Minister of Industry, Tourism and Investment Bob McLeod said, adding the high value of bids shows the industry's renewed confidence in the NWT oil and gas reserves. "These are some of the best parcels of land in the territory so I can see why there was so much interest."

The call for bids closed on June 21, and the winning bids, announced by the department on July 4, went to MGM Energy Corp., Shell Canada Ltd., Imperial Oil Resources Ventures Ltd., ConocoPhillips Canada Resources Corp., and Husky Oil Operations Ltd., which won bids on two parcels of land between Norman Wells and Tulita for $376 million.

Companies that submit work deposits representing 25 per cent of their work proposal bid will be eligible to receive an exploration licence, according to department spokesperson Genevieve Guibert.

Sahtu MLA Norman Yakeleya said the region is in a good position to reap the benefits from these projects.

"There is still plenty of work to do for any one of these projects to proceed, as the Sahtu Dene and Metis will be major players in going forward with this," Yakeleya said in a written statement.

"It is my hope that the agreement will be done in a timely manner with industry, that our people can go to work, and that our land will receive the highest protection against any negative impacts."

The NWT holds the potential for 89 trillion cubic feet of natural gas, and seven billion barrels of oil, McLeod said, adding the large bids are likely primarily focused on oil plays, although some can also be looking for natural gas.

MGM Energy won bids for three exploration licences in the central Mackenzie Valley and committed to spend $5 million along with a private partner company on exploration over the next four years.

MGM president Henry Sykes said the company has been impatient with the length of time it has taken to start construction on the natural gas pipeline and will focus on the prospective liquids-rich shale plays in the land parcels they acquired, which are located within 10 to 30 kilometres from the existing Enbridge Pipeline.

"That doesn't mean we're going to ignore the Mackenzie Delta," Sykes said, referring to the company's prospective natural gas assets, located north of Inuvik. "Just that our position in the Mackenzie Delta can be kept at a low simmer

for a period of time.

"We have the land, the resources are in a very good position in the Mackenzie Delta and we would certainly like to get started right away, but can't justify spending on it until we see movement on the pipeline.

"We think this pipeline is the single most important capital project in Canada today."

McLeod said the large land parcel commitments in the recent bidding indicate confidence in the prospects for the Mackenzie Valley pipeline, and the purchases may be used to influence greater urgency in the pipeline's construction.

"We are very optimistic the pipeline will be built," McLeod said, adding his department is pushing for the federal government and the proponents of the pipeline to get back to the table to negotiate a fiscal framework.

Bids were also received for two of the three parcels in the Beaufort Sea and Mackenzie Delta from Arctic Energy and Minerals Ltd., with work proposals valued at $1 million per land parcel. The offshore parcel in the Beaufort Sea received no applications for drilling, as the National Energy Board is still reviewing whether drilling plans there are safe for workers and the environment.

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