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Toronto Star: Shell Canada, Fort McKay band sign oilsands deal

Shell Canada, Fort McKay band sign oilsands deal
Apr. 19, 2006. 06:10 PM
CANADIAN PRESS

CALGARY — Shell Canada Ltd. (TSX: SHC) has signed an agreement with the Fort McKay First Nation to acquire oilsands leases through an exchange of options. The deal, announced Wednesday, involves Shell's Lease 90 and Fort McKay oilsands lands received as part of the band's treaty land-claim settlement.
 
The land will be leased to Shell for potential incorporation into the Athabasca oilsands project. Lease development models remain under review and financial details were not released Wednesday. “A lease of Fort McKay First Nation's land will be an excellent addition to our long-term business plan,” said Clive Mather, Shell Canada's CEO. “While additional work with government is still to be done, this agreement has the potential to return real value to both Shell and Fort McKay for many years to come.”
 
The Fort McKay First Nation — about 65 kilometres north of Fort McMurray — will be entitled to royalty payments on production and an option to acquire and work with Shell on the development of Lease 90. Chief Jim Boucher said his community is “excited about the possibility of becoming an oilsands developer in our own right.”
 
The Athabasca oilsands project consists of the Muskeg River Mine, about 75 kilometres north of Fort McMurray, and the Scotford upgrader, near Fort Saskatchewan, northeast of Edmonton.
 
The oilsands development is a joint venture among Shell Canada, with 60 per cent, Chevron Canada, with 20 per cent, and Western Oil Sands LP (TSX: WTO), with 20 per cent. Shell Canada's shares closed up 18 cents to $45.84 on the Toronto Stock Exchange.
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