Indian and Northern Affairs Canada: Annual Report 2007-2008

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Indian and Northern Affairs Canada: Annual Report 2007-2008

by NationTalk on September 10, 20081440 Views

CEO’s Message

It was a pleasure for me to rejoin Indian Oil and Gas Canada ( IOGC) in April 2008, when Gregg Smith, who served as CEO/Executive Director of IOGC from 2005 until just recently, made the decision to retire. I was glad for the opportunity to come back and continue our work in support of First Nations. I found that fiscal year 2007-2008 has been one of change, adjustments and challenges, but again, a very busy year for IOGC.It has been estimated that one in six Albertans are employed by the oil and gas industry. While oil and gas development is branching out to other parts of Canada, in terms of economic development and employment, this level of activity has many benefits for First Nations people and their community development across the country. Overall oil and gas activity on First Nation reserve lands continued to be strong in 2007-2008. As an organization, IOGC responded by continuing to focus on modernization and internal change, targeting specific key initiatives, with the aim of making the best use of the resources available to us.

Of particular note is the number of wells drilled on Indian interest lands this year, a total of 215, which was the highest level in four years. Compensation and rental moneys collected by IOGC on behalf of First Nations remained steady, with $13 million collected in 2007-2008. This was down slightly from $14.3 million that was collected in the previous year, but still a strong showing. Oil production from First Nation reserve lands and oil royalties collected on behalf of First Nations were both higher than the previous year, with oil royalties increasing $14.4 million to $47.8 million in 2007-2008. Royalties collected from gas and gas products remained almost unchanged as compared to last year, with a total of $133.3 million collected. This is just slightly more than the $133 million collected in 2006-2007.

My predecessor, Gregg Smith, made note last year of the substantial drop in total moneys collected by IOGC on behalf of First Nations, which was mainly attributable to significantly lower gas prices and production. This fiscal year, royalty moneys increased over the previous year total of $189.5 million to $202.4 million (including $5.1 million of TLE 5.08 moneys) collected by IOGC on behalf of First Nations in 2007-2008.

Issues of recruitment and retention of staff continue to be a challenge for IOGC. These same issues have become difficult for many organizations within the oil and gas industry in recent years. In particular, turnover and staffing of several high-demand industry job areas continue to be problematic. IOGC has made significant strides in recruitment and retention in 2007-2008, staffing a number of positions and this work is ongoing. We are concentrating some effort on succession planning, as demographics indicate that future retirements will pose additional challenges. At IOGC, we are very aware that our people are what make this organization what it is, so this is an important concern for all of us.

IOGC has continued work on several multi-year key initiatives that are improving its business processes and benefiting oil and gas First Nations and companies. Progress made on IOGC’s key initiatives are included in the ensuing pages.

One of our overarching goals relates to supporting and encouraging First Nation control of oil and gas on their reserve lands. This vision has two parts: individual First Nation control and collective First Nation institutional control. When the First Nations Oil and Gas and Moneys Management Act ( FNOGMMA) came into force in 2006, this was quite a milestone for IOGC and participating First Nation communities. This Act allows First Nations to assume control and management of their oil and gas resources and monies derived therefrom if their community members so choose. During the fiscal year, the related First Nations Oil and Gas Environmental Assessment Regulations were completed. IOGC is working towards implementation of FNOGMMA, developing required codes, laws and agreements specific to each First Nation. This process is also nearing completion. It is estimated that the three participating First Nations will each hold their community ratification votes in early 2009. If the vote is favourable, the resulting transfer may be a reality by mid-2009.

Working in cooperation with the IRC, IOGC has gone full steam ahead in its work modernizing the Indian Oil and Gas Act this year and I am pleased to say the progress on this key initiative has been substantial. Over the course of the year, a drafting team worked thoroughly and carefully through each successive draft of the proposed amendments. A Joint Technical Committee also met periodically to iron out any remaining issues with the proposed amendments. The regulations will be drafted separately.

Being back at the helm of such a strong and forward-looking organization gives me cause for much optimism. I am proud of our employees and their commitment to working for the betterment of First Nation communities, and I know I speak for all of us when I say that we are glad to be part of the positive changes that are taking place in oil and gas development for many First Nation communities. We look forward to all that the coming year may bring, and to IOGC becoming a more client-focused organization.

View Indian and Northern Affairs Canada: Annual Report 2007-2008

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