ALBERTA

Fort McKay First Nation Can Appeal Oilsands Approval

10/18/2013 01:43 EDT | Updated 12/18/2013 05:12 EST
CP
EDMONTON - Alberta's highest court has given an aboriginal group the OK to appeal regulatory approvals of an oilsands project.

The Court of Appeal is permitting the Fort McKay First Nation to challenge the go-ahead given to Brion Energy's plans for a 50,000-barrel-a-day operation northwest of Fort McMurray.

The ruling means the First Nation will be allowed to question the Alberta Energy Regulator's decision not to consider the band's arguments. The band believes its constitutional rights were violated during the approval process.

"There is a live issue respecting the regulator’s interpretation of its power to decide constitutional issues," wrote Justice Frans Slatter. "The issue is of general importance, and leave to appeal is justified."

Market reaction to the news was swift and negative for Brion, a joint-venture between Calgary-based Athabasca Oil Corp. and a Canadian unit of Chinese state-owned firm PetroChina.

Shares in Athabasca were down nearly 13 per cent in late afternoon trading on the Toronto Stock Exchange to $6.08.

First Nations have expressed concern that Alberta's new way of considering developments stops regulators from looking at arguments based on aboriginal rights, which are enshrined in the Constitution.

The government is implementing a new office to deal with issues such as aboriginal consultation questions separately from the Albert Energy Regulator. First Nations have criticized those plans and say dealing with those issues through the bureaucracy weakens their constitutional rights.

Athabasca and PetroChina announced a deal in 2009 that would see the Chinese company own 60 per cent of the Canadian firm's McKay River and Dover oilsands projects.

The deal included a provision that allows PetroChina to snap up Athabasca's 40 per cent interest in each project after it has obtained regulatory approval.

PetroChina exercised that right in early 2012 for McKay River, buying Athabasca's stake for $680 million, making it the first oilsands project to be fully controlled by the Chinese.

However, a similar purchase hasn't been able to take place for the Dover project, delaying Athabasca from getting a much-needed cash infusion of $1.32-billion.

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