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Winnipeg Free Press - PRINT EDITION
Arctic leases raise eyebrows
Tiny U.K. firm buys exploration rights
Adrian Wyld / The Canadian Press archives Northern Development Minister John Duncan didn�t respond to an NDP question about failing to intervene when major Arctic exploration leases were sold. (CP)
OTTAWA -- An Opposition politician says the federal government should have stepped in to block the bargain-basement sale of major oil offshore exploration leases in the Arctic to a tiny British company with few resources and even less northern experience.
"Why did the minister fail to protect this valuable resource?" asked New Democrat MP Dennis Bevington on Thursday after last week's purchase of the exploration rights to 9,000 square kilometres in the Beaufort Sea to Franklin Petroleum.
Records in the United Kingdom show Oxfordshire-based Franklin has two employees -- CEO Paul Barrett and his wife. It has $200 in the bank and a net worth of minus $32,000. Barrett has no experience working in the Arctic.
Franklin bought the rights -- which are in addition to two Beaufort parcels it bought last year -- for the promise of $7.5 million worth of work over the next five years in a region where even an inexpensive well costs more than 10 times that.
"To award such a large quantity of offshore acreage to a piddly little company doesn't seem to be in the public interest," said analyst Paul Ziff in Calgary.
Bevington points out the owner of the rights isn't restricted from transferring or selling them. "What we have is a loss of control over a very large part of the Beaufort Sea."
Arctic offshore leases come under the purview of Northern Development Minister John Duncan, who did not answer Bevington's question. Duncan's parliamentary secretary, Greg Rickford, called the question "another 'gotcha' moment from the member for Western Arctic."
Previous exploration has already uncovered more than one billion barrels of oil and nine trillion cubic feet of natural gas in the region. It has the estimated potential of 5.4 billion barrels of oil and 53 trillion cubic feet of natural gas.
Bevington and Ziff also have concerns over Franklin's competency to operate in a difficult and sensitive environment.
"We're talking about one of the most environmentally sensitive areas in Canada," said Ziff. "This type of award flies in the face of public concern."
-- The Canadian Press
Republished from the Winnipeg Free Press print edition September 21, 2012 B9
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