BC Shutdowns Could Impact Winter Drilling

Anadarko Petroleum Corp. confirmed last week that it had shut down two exploration and production projects in the Halfway River First Nation territory in northeastern British Columbia after its employees were asked by the Indian tribe to leave. The shutdown by the world's largest independent added to growing concern throughout Canada's oil and gas industry, which could lead to projects being canceled during the upcoming winter season.

The Anadarko shutdown is but the latest in a so far peaceful battle, which began three weeks ago when the Halfway River First Nations band blockaded a Petro-Canada pipeline site in western British Columbia.

In mid-August, the 200-member Halfway band headed by Chief Bernie Metecheah set up a blockade to prevent construction of the Petro-Canada pipeline because the band claims that the proposed 23-kilometer right-of-way crosses sacred hunting areas. The blockade at the site, which is located about two hours from Fort St. John, was manned by 55 people, and all of Petro-Canada's employees working on the pipe and wells there were sent away. Construction is set to begin on the pipe this month, and so far, it remains on schedule. However, Petro-Canada said the blockade also has shut down three exploration wells there.

The Halfway claim that the blockade was called to draw attention about too much energy production in the so-called Treaty 8 region, and also because of what they called unresolved treaty issues with Canadian and provincial governments. The Halfway, which are only one of many tribes in the region, claim that Canada and the British Columbia government have ignored a treaty signed in 1899, which guarantees them the right to live off of the land.

The Halfway also have called for environmental impact statements before any further E&P is allowed. Along with the Halfway, other bands also have threatened blockades and legal battles with producers in the region, including the Doig River First Nations and the Saulteau First Nations. So far, only the Halfway have instigated actual blockades. The bands say they want more say in resource development, and more important, a share of the benefits from the rich resources being produced.

Anadarko, based in Houston, said that the Halfway band asked its employees to leave on Aug. 24, and Anadarko complied with the request. Westcoast Energy Inc., the Canadian pipeline heavyweight headquartered in Vancouver, also said the Halfway had made demands about closing two of its planned BC projects. Westcoast wants to build a natural gas pre-treatment facility as well as an additional pipeline in northeast British Columbia.

The standoff looms over many planned projects throughout Canada, especially in British Columbia, which has become one of western Canada's most prolific regions for oil and gas development. The problems even threaten to disrupt production in the Ladyfern prospect, which has been dubbed one of the leading prospects in North America (see NGI, Aug. 27).

Much of the concern also centers on the upcoming winter season, when many of the E&P activities may only be carried out when the land is frozen, usually between the end of December and extending through March. A record number of wells already are planned, spurred by the Ladyfern discovery. So far, Ladyfern producers have not been targeted for blockades.

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