Double win for Athabasca Oil
Athabasca Oil Corp. (TSX: ATH) shares jumped by nearly 11% on Wednesday as an Alberta Energy Regulator panel approved the company's Dover oil sands project.
Shares were trading at $8.12 each by Wednesday afternoon after reaching a morning high of $8.63 – their highest point since April.
The Dover Project – located 95 kilometers northwest of Fort McMurray – is a joint venture between PetroChina and Athabasca Oil, although the Chinese partner is set to buy out the Canadian producer for more than $1.3 billion, according to the Globe and Mail.
Regulatory approval now rests on the Alberta provincial government and the company's ability to meet the panel's 10 conditions.
A major opponent to the project was the Fort McKay First Nation which "expressed concern about the project’s effects on its traditional land use activities," the Regulator's summary decision reads.
The main area in dispute is Moose Lake – located 13km from where drilling would occur, although some well pads would be within 1,500 meters of the lake.
ALCES modelling – a study which Dover and the panel were highly critical of – found that the operation would impact fish populations in particular because they are already "well below the natural range of variation." The study predicts that these populations "will drop significantly over the next 40 years."
However, an assessment by Dover concluded that "there would be no effects on most environmental components, although there would be minor effects on air quality, visible water vapour plumes, fish and fish habitat, and noise."
After considering opponents' claims, the panel still concluded that the project's economic benefits "are so significant that despite the social and environmental impacts described by the parties, the positive aspects of the Project outweigh the negative impacts."
Economic benefits include approximately 9,000 news jobs, $5.3 billion in added economic activity as well as $1.5 billion in tax and royalty revenue for local, provincial and federal governments, Athabasca Oil noted in a statement.