A Chinese company that was the majority shareholder of an oil-and-gas firm seeking to drill in Yukon’s Eagle Plain basin has sold its stake in the project.
State-controlled CNOOC Ltd. used to own 60 per cent of Northern Cross Ltd., but sold its shares to an existing Canadian shareholder in a deal that closed on Oct. 7, according to Northern Cross president Richard Wyman.
“Now it’s 100 per cent Canadian-owned and -controlled,” Wyman said. He would not reveal the identity of the shareholder.
Wyman didn’t say why CNOOC decided to sell its stake, but said the future of Northern Cross’s plans for the Yukon is “not certain at all.”
“The regulatory framework in the Yukon has got serious challenges,” he said. “And so I can’t tell you whether this is going to proceed or not. There’s a lot of uncertainty.”
The company’s website still states that CNOOC’s investment “provides Northern Cross with the capital to honour its commitments in Yukon and provides longer term financial and technical support to advance Northern Cross’s business plan.”
Northern Cross submitted a proposal to drill up to 20 wells in the Eagle Plain basin to the Yukon Environmental and Socio-economic Assessment Board in July 2014.
In February 2016, YESAB decided it didn’t have enough information to determine how the project would affect the Porcupine caribou herd. It referred Northern Cross to executive committee screening, a more rigorous assessment that would require the company to resubmit the same proposal or a modified version, and start the process over again.
In response, Northern Cross filed an application with the Federal Court of Canada for a judicial review of the decision, arguing that YESAB acted beyond its jurisdiction and failed to observe procedural fairness. The company wants to be given a chance to provide enough information for YESAB to make a recommendation without executive committee screening.
On Thursday, Wyman said the hearing should take place in the first half of next year.
He said he doesn’t know whether Northern Cross will pursue the Eagle Plain project if the court sides with YESAB.
“The barriers to undertake this small project are significant,” he said.
Northern Cross was incorporated in 1994, when the company began exploratory work in the Eagle Plain basin.
Wyman maintains the project would have “a profoundly positive effect on the Yukon economy,” and would help the territory cut greenhouse-gas emissions by reducing the amount of oil and gas it imports.
“It was a good idea, but 22 years later… the barriers are mounting,” he said.
Still, he’s not quite ready to throw in the towel.
“Not yet,” he said. “I’ve still got a pulse.”
Contact Maura Forrest at email@example.com