Stoney Nakoda oil and gas deal with Chinese firm questioned
Calgary business expert doubts First Nation's venture with Hong Kong company will succeed
A Calgary business expert says he's skeptical an oil and gas deal between the Stoney Nakoda First Nation and a Chinese firm will come to fruition.
The First Nation announced this week it's signed a deal with Huatong Petrochemical Holdings Ltd. to explore and develop 49,000 hectares of its land west of Calgary.
The joint venture would see the Hong Kong firm provide all the funding while Nakoda Oil & Gas Inc. acts as the primary operator.
But according to Bob Schulz, a petroleum land management expert at the Haskayne School of Business at the University of Calgary, the Chinese firm is only recently incorporated and not well known.
"I'm skeptical of the probability this is going to get to the finish line,” he said.
“There’s a question there in terms of how much cash will be coming in and where does the cash go. And I certainly hope what the band doesn't do is to spend the money before they actually have it.”
Jennifer Winter, who teaches at the U of C's School of Public Policy, said it remains to be seen how much of a share of the revenue the First Nation would receive under the agreement.
"It's excellent opportunity for this First Nation in terms of jobs, economic development and the potential revenues that come from developing the oil and gas,” she said.
"I certainly hope for the Stoney group that this deal comes through and it works out well for them. But there certainly is a history of things not working well in dealing with companies that are not well known.
If the deal does go ahead, Winter said the revenue would be held in trust by the Canadian government. So there would be time for the First Nation to plan how it wants to invest the money, she said.
No one with the Stoney Nakoda First Nation could be reached for an interview.