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Ft.McKay First Nation achieves agreement

February 26, 2014

A long-standing dispute over land development between an oil sands operator and a First Nation has been worked out through a negotiated agreement.

Fort McKay First Nation (FMFN), is located along the banks of the Athabasca River in the Regional Municipality of Wood Buffalo north of Fort McMurray. There are approximately 700 Dene, Cree and Métis community members living in Fort McKay. In 2005, FMFN settled a specific claim by selecting reserve lands adjacent to Gardiner Lake and Namur Lake, known locally to the community as Moose Lake and Buffalo Lake. These reserves are located approximately 50km northwest of Fort McKay. This particular area in our traditional territory is sacred to the community of Fort McKay and is the resting place of many of FMFN ancestors.

The First Nation took legal action to block development of a key part of the proposed Dover oil sands project adjacent to an expanse of reserve land called Moose Lake used for hunting and trapping. The operator, Brion Energy Corporation (Brion) felt the pressure. It negotiated and reached an agreement on the development of the Dover Commercial Project. The terms of the agreement have not been disclosed by the parties.

The burgeoning prosperity in Fort McKay is a direct result of the community’s embrace of the nearby oil sands industry. A host of First Nations-owned businesses that work with energy companies create over $100-million of annual revenue for the 700-person community located 65 kilometres north of Fort McMurray. Unemployment is negligible. In recent years, Fort McKay has built an indoor hockey arena, and with the help of Royal Dutch Shell PLC, a large building for daycare and the reserve’s elders. Future building plans include water and sewer upgrades, stone paths and a 1,800-person amphitheater.The goal of the Fort McKay First Nation is to get residents out of the hamlet’s old trailers and houses and into 100 new homes in the next four years.

The Dover joint venture is operated by Brion Energy Corporation. (“Brion Energy”), a company jointly owned by Athabasca Oil Corporation(40%) and Phoenix Energy Holdings Limited (“Phoenix”; 60%), a wholly-owned subsidiary of PetroChina Company International Limited (“PetroChina”).

The Dover project plan calls for production of 250,000 bbl/d SAGD comprised of five phases of 50,000 bbl/d, recovering will recover an estimated four billion barrels of bitumen over its projected production lifetime of 50 years. The project is currently in the final stages of the regulatory approval process. The Brion website states that it anticipates construction to start later this year. The project cost is estimated at $2.5B.

Athabasca Oil Corporation (ticker ATH on TSX) trades at $8.29/share and has market cap of $3.3B.


The Fort McKay First Nation worked out a compromise for the benefit of its citizens. FMFN is dealing with a super-strong economy and chose to garner further benefits from Brion, rather than play the spoiler.