'No takers' step up for rights at Fort Liard

CALGARY -- An offering of natural gas exploration rights in the Fort Liard area of the Northwest Territories has drawn zero interest from energy companies.

"There's no takers. There's no interest," said Harry Deneron, chief of the Acho Dene Koe Band in Fort Liard.

It was the first offering of exploration rights in a decade in the region, which is in the southwestern corner of the NWT, an area connected by pipeline to British Columbia and Alberta, unlike the Mackenzie Delta, where there are major gas fields but no pipeline.

Mr. Deneron, who was in Calgary yesterday at Insight Information Co.'s northern energy conference, said another offering is possible but isn't likely to occur soon.

The federal government in mid-August issued a call for nominations, a process in which energy companies identify areas they are interested in. The two most popular parcels of land were expected to have been put forward in a call for bids, where energy companies make spending commitments to secure the exploration rights.

One industry source suggested the land available wasn't particularly interesting.

"There may be more interest in another round," the person said, adding that the better land is elsewhere in the Fort Liard region.

Fort Liard is intriguing for natural gas exploration. Chevron Corp. in 1999 made two giant gas discoveries there. However, like most finds in the region, the wells began with strong production but tailed off fairly quickly.

Companies actively drilled in the region until 2004 and had cited the lack of new land to explore as a reason for pulling back.

The federal government will organize meetings with industry and Mr. Deneron to figure out what went wrong.

"We were disappointed," said George Green, director of oil and gas management for the northern oil and gas branch of Indian and Northern Affairs in Ottawa.

The question of whether the land available was promising for gas drilling is unclear, Mr. Green said.

"That could be one of the issues but I'm absolutely sure it's not the only one."

Elsewhere in the NWT, including the Central Mackenzie Valley and the Mackenzie Delta, exploration rights were issued earlier this year. In the Central Mackenzie, where there is an oil pipeline connection to Alberta, a record $71-million in spending commitments was made. In the Delta, where there is no pipeline, $52-million in spending was committed to two blocks in the Beaufort Sea, far less than a record of $466-million for the region in 2000.

Meanwhile, Point North Energy Ltd., which owns assets in the region, was granted court protection from creditors, the company said.