by Jon Harding

19-07-08 The other side of a mysterious oilsands story out of Taipei emerged when the head of a Saskatchewan-based First Nations business collaboration revealed four of the province's aboriginal communities have struck a partnership with Taiwan's state-owned petroleum refiner.
Any pursuit of oilsands development in Saskatchewan by CPC, one of Taiwan's largest refiners and gasoline retailers, will be done as a joint-venture alongside Indian Oilsands, said Ken Thomas, a Saskatoon-based economic development expert who helped unite the parties and who has previous business ties to Taiwan.

"We have met several times with Saskatchewan officials," Thomas said. "Deputy ministers and such from the premier's office, the Department of Enterprise and Innovation and Department of Energy and Resources. They welcomed the initiative regarding the project, which primarily has been led by myself and Chief Richard Gamble of Beardy's and Okemasis First Nations (near Duck Lake north of Saskatoon)."
Thomas is former president of the Federation of Saskatchewan Indian Nations and a past chairman of Aboriginal Business Canada.

He said CPC committed to invest about $ 800 mm over the next five years to acquire and explore potential oilsands leases in Saskatchewan, where one company, Calgary-based Oilsands Quest, has quietly made substantial strides of late developing the province's first oilsands project. Oilsands Quest is only weeks away from beginning to inject steam underground at a pilot project at its Axe Lake discovery, which lies northeast of oilsands hub Fort McMurray and across the border from the heart of the Athabasca trend.
Axe Lake holds some 6 bn barrels of oilsands resource, according to recent independent estimates.

Thomas said as many as 10 Saskatchewan First Nations communities have been asked to join the Indian Oilsands initiative. He said they will acquire as many as 100,000 hectares of land through the federal Treaty Land Entitlement program, pool it within the CPC-Indian Oilsands partnership and pursue a "fully integrated" development strategy that would include oilsands production, upgrading of bitumen and refining.
"We will be aggressive buyers, starting with the August land sale," he said. "We plan to acquire a series of oilsands leases with high potential adjacent to the Oilsands Quest leases near La Loche, Saskatchewan," Thomas said.

CPC said that it had struck a preliminary accord with a Canadian company on possible joint exploration for oilsands. The statement cited Ken Thomas as a Canadian contact. The state-controlled oil company is scouring the globe for reserves and like many national oil companies, it has made overtures about wanting to join the global rush to the Canadian oilsands.
"We're trying our best in finding partners" for oil exploration, Jessica Tang, a CPC spokeswoman said, adding details on the collaboration with Indian Oilsands were not yet mapped out.

The story raised eyebrows within the Saskatchewan government's department of energy andresources.
"If such a proposal is going forward, it's doing so at a very preliminary stage," said Roy Schneider, spokesman for the Saskatchewan government. "We do know there are a number of bands in the province, however, that have shown an interest in pursuing an oilsands project and in attracting some foreign capital to help them do it."

Thomas said his group has made a pitch to Oilsands Quest, asking to buy a piece of the Axe Lake development. Oilsands Quest is on the verge of a pilot project to test the economic viability of a full-scale commercial development that would initially produce 30,000 barrels of bitumen a day, and could grow to 100,000 barrels, using the steam-assisted gravity drainage production method.
The Calgary company's own hunt for a joint-venture partner recently intensified, founder and chief executive Chris Hopkins said. Hopkins recalled being approached informally by Thomas but he said Oilsands Quest is looking to partner with a global super major "that can provide the engineering and management of cost-control systems.

"Axe Lake is capable of sustaining production of 100,000 bpd and a development of that scale requires cost controls and systems, which is experience that we simply don't have," Hopkins said. "You want a major multinational oil company that has that kind of experience under its belt as a partner."
"I'd say I'm always pleased that there is an interest in oilsands in Saskatchewan. But I can't comment on them because I know nothing about them. I'm not even familiar with the Taiwanese company."