Inuvik businesses hit by MGM Energy's drilling delay
Friday, September 18, 2009
CBC News
Some businesses in Inuvik, N.W.T., have less work lined up for the coming months after a Canadian gas exploration company said it won't explore in the region this winter.
MGM Energy Corp. announced this week that it will postpone drilling in the Mackenzie Delta region in the 2009-10 winter drilling season, citing continued uncertainty surrounding the proposed Mackenzie Valley natural gas pipeline project.
The Calgary-based company also postponed exploration in the Delta this past spring.
"It has huge effects. That was one of our main people we work for," Kurt Wainman, owner of Northwind Industries in Inuvik, told CBC News on Thursday.
Wainman, whose business built temporary roads and gravel pads and supplied tanks for companies like MGM Energy, said his workforce has shrunk from 140 people down to about 20 since the company halted drilling in the region.
Report expected in December
The Mackenzie pipeline proposal is still before the Joint Review Panel, which is examining the project's environmental and socio-economic impacts on the Northwest Territories.
The release of the panel's report has been delayed several times and is now expected in December.
The Inuvialuit Regional Corp. was also hoping its companies would benefit from MGM Energy's exploration work, which has been taking place on Inuvialuit concession lands.
Although that won't happen this winter, the Inuvialuit corporation will collect a $10-million penalty from the company in August 2010.
It will be the second such payment the corporation will receive from MGM Energy for not completing drilling works by deadlines previously agreed upon.
Some businesses diversifying
While some businesses in Inuvik are suffering from MGM Energy's decision not to drill this winter, others have opted to diversify, seeking work outside the oil and gas exploration industry.
"In the past years, we've decided to go another route here to get the most out of local contracts and government contracts and stuff like that, and that's the way we've been surviving," said Lyle Gully, co-owner of Bob's Welding in Inuvik.
"We really don't depend on MGM or any other oil companies for work nowadays."
MGM originally had an agreement with Chevron and BP to drill three wells each winter until spring 2010.
The drilling of those last three wells has been put on hold for at least one year while key decisions are made on whether the pipeline will proceed.
http://www.cbc.ca/canada/north/story/2009/09/18/nwt-mgm-postpone.html
