Our Takeaways from B.C. & Blueberry River Agreement
Event
Broad Strokes of New Land Use Framework Agreed Upon
Impact: POSITIVE
Our preliminary takeaways from yesterday's press conference and press release (see here) include:
Focus is on Future Land Disturbance (not production or activity levels):
The policy agreement is focused on the amount and location of incremental land disturbance. This does not limit potential production upside, but will limit the incremental amount of disturbed land to 750 hectares (1,853 acres or <3 Sections). Although this sounds like a significant amount of land, each new pad consumes ~10 acres (plus roads and pipeline right of ways). It is possible, although not explicitly stated, that this figure is net of restored lands elsewhere, and it is unclear how permits in process will be treated.
Some Land Sterilization Likely, but Largely Outside of Montney Fairway: There will be land protection in high-value areas. This will include more than 650,000 hectares protected from new O&G and forestry activities. For context, this represents approximately 1.6 million acres or >40% of BRFN's 3.8 million claim area. We have included a land map with the most protected areas (Exhibit 1). It appears that the impact on most producers is negligible.
Development to Resume Expeditiously: In an effort to help the local economy, BC/ BRFN intend to support "a series of ... oil and gas activities to proceed throughout Blueberry River's claim area". Although we do not expect this to result in material near-term changes in 2023 capital programs, it is a positive that the timing is seemingly a priority.
Collaboration and Relationships will be Key: BC and BRFN "will determine together where certain activities can occur, and under what expectations or requirements". Companies, the province, and First Nations groups "will sit together to discuss, design, and agree to development plans". Given Chief Desjarlais' comments at the press conference, pre-engagement on development plans and relationships will be key.
Treaty 8 First Nations to Benefit from Land Restoration Fund and Revenue Sharing: It is our understanding that this revenue sharing and royalty participation will come from the province's share rather than producers.
Agreement with Other Treaty 8 First Nations Expected within Days.