Shell withdrawal has no impact on NWT: Ramsay
Minister remains optimistic about oil and gas
Karen K. Ho
Northern News Services
Monday, October 5, 2015
LLI GOLINE/NORMAN WELLS
Industry, Tourism and Investment Minister David Ramsay said he is not concerned about Royal Dutch Shell's announcement they are pulling out of exploration off the coast of Alaska, despite an investment of more than $7 billion.
A drill stands above the mountains during Husky Oil's winter drilling program at Summit Creek.
Norman Wells Mayor Harold MacGregor said the recent move by Royal Dutch Shell to pull out of its exploration program in Alaska won't affect the Sahtu region compared to the high cost of operation and a lack of all-weather road. - photo courtesy of Husky Energy Inc.
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"It's not unexpected and it shouldn't have a major effect on our opportunities here in the Northwest Territories," he told News/North by phone.
Shell Canada does currently own a parcel of land in the territory it purchased in the Central Mackenzie Valley in the Sahtu region in 2011. However, Norman Wells mayor Harold MacGregor said that the company has not advanced exploration or other work on the site in the four years since its acquisition.
While the minister acknowledged Shell was one of the last major oil and gas companies to do work in the North during the recent downturn in the price of crude oil, he said that there is still a commitment from many of them to do exploration in the Arctic.
"Right now the economy isn't there for them to be spending that type of money," Ramsay said. "At some point and time that's going to change."
The minister said the Arctic region containing one-fifth of the world's untapped oil and gas reserves.
"The waters off of our coast in the NWT still have the potential to rival the Gulf of Mexico in terms of straight-up resources," he said.
Ramsay also called the move by Royal Dutch Shell a business decision that was influenced by factors specific to Alaska, including legislation regarding the location of their drilling platforms as well as disappointing results from the Burger J exploratory well in Alaska's Chukchi Sea.
"They're struggling with a level of unpredictability that currently exists in the U.S. federal regulatory environment," he said.
MacGregor also didn't think Shell's decision was going to further impact the situation of the oil and gas industry in the Sahtu region.
"Without an all-year road here, the costs are just so high to do development, exploration or anything," he said.
MacGregor said that Shell has properties in the region they have never explored or developed to his knowledge.
"The cost of working up here, the cost of work, there's no way to get it to market, everything weighs against them doing anything for several years," he said.
"I think it's just going to be left in the ground until it's needed."
