Energy partnership allows First Nations to develop
own resources
By Brenda Austin, Today correspondent
Story Published: Oct 6, 2009
Creating an environment where tribes and First Nations can be proactive
in energy investments on their land is what the private equity
development fund, known as Native American Resource Partners, does best.
IBC Energy, Inc. – owned by the 44 Alberta First Nations – recently
signed an agreement with NARP to identify, develop and fund natural
resource development projects for First Nations in Alberta and British
Columbia.
IBC Energy is a subsidiary of the Alberta-based Indian Business
Corporation, which has provided more than $60 million in financial
services and expertise to First Nations clients throughout Alberta since
1987.
IBC Energy was established in 2008 to partner with First Nations in the
development of natural resources; including oil, gas and wind power or
bio-diesel opportunities. IBC also works with First Nations to build
business management capacity so control of assets can eventually be
transferred to the nations.
NARP’s management team, headquartered in Salt Lake City, Utah, has a
successful track record in developing energy opportunities with tribes
in the United States. President and CEO John Jurrius said NARP was
introduced to the First Nations of Canada a year ago. With their
know-how and the backing of capital provider Quantum Energy Partners of
Houston, NARP partners with tribes and First Nations on ventures in
which both own interests and earn profits.
“We feel that First Nations are part of the solution to Canada’s energy
needs, both renewable and conventional sources. Tribes and First Nations
should not be passively providing their resources; they should be
actively participating in their development. Our company provides a
capital solution for nations enabling them to co-partner in the
development of their land versus passively allowing others to develop
those resources.”
Jurrius expects to make an initial capital commitment of $100 million to
$250 million immediately with projects in the Alberta region. “We are
creating a co-partner resource company that NARP, IBC and the nations
will jointly manage. NARP provides the capital investment and expertise
and the nations provide the resource opportunities. The ultimate goal is
for the nations to gain capacity; to own and manage their own resource
companies.”
According to Jurrius, the First Nations will contribute to the projects
in several ways, the most important being human resources. “When you are
working on a project you want to work with local knowledge. By way of
the nations’ land and mineral ownership they have significant resources.
The companies we are working to establish will be managed day-to-day by
the nations and representatives from NARP and IBC. This allows the
nations to be actively involved in the companies.
IBC Energy General Manager Rob Rollingson said 12 projects with Alberta
First Nations are in the research stage. “We are still looking to sign
off on our first deal, but there doesn’t seem to be a shortage of
opportunities. Instead there is a shortage of people who know who we are
and what we do. NARP brings with them their expertise and a long history
of success in working with American tribes. They also bring capital.
First Nations have traditionally lacked in both capital and capacity. It
takes a great deal of expertise to manage and run a successful oil and
gas operation. Both NARP and IBC can bring some capacity-building to
First Nations in Alberta and British Columbia.”
The First Nations, NARP and IBC each receive an ownership interest in
the energy companies they create. Quantum Energy Partners, because it
put up the capital, receives preferential return on its investment. When
Quantum has met its return thresholds, the nations, IBC and NARP begin
to participate.
“We feel that by assisting a First Nation in becoming a commercial
partner we are helping them fulfill their journey to gain capacity while
generating good investments for ourselves,” Jurrius said. “This
partnership provides the opportunity for the Nations to participate in
the commercial development of their resources without risk, while
maintaining traditional royalties so they can build the capacity and
expertise to ultimately develop their own resources in the future
without partners.
“We are looking at developing everything from conventional oil and gas
to what we call mid-stream business, which is gas-gathering,
transportation and processing. On the renewable side our focus is wind.
Renewable energy can include anything from biomass to solar power and
hydro. NARP and IBC will jointly pursue energy projects with the first
step of that process being identification of resources and mining
investment opportunities.”
Rollingson said the goal of both IBC and NARP is to have an exit
strategy defined so eventually ownership is returned to the nation. “The
opportunities this partnership can bring to nations are incredibly
exciting. They owe it to themselves to investigate and find out what
NARP and IBC can offer them.”
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