Benefit to Yukon Summary

Transcription

1 Benefit to Yukon Summary As part of a deliberate, long term strategy, and in accordance with a Benefits Agreement (BA) pursuant to Section 68 of the Yukon Oil and Gas Act, dated November 4 th, 2013; Northern Cross (Yukon) Limited (NCY), has undertaken a variety of steps aimed at providing employment and business opportunities to Yukon citizens and businesses in the execution of 2D and 3D seismic program at Eagle Plain. This report summarizes the total expenditure incurred and the portion which benefitted Yukon Citizens and Businesses during NCY s seismic project spanning the period from October 2013 through to April This report also summarizes Yukon citizen employment and training throughout the same period. A Project Committee was established with representation from Vuntut Gwitchin First Nation (VGFN), Nacho Nyak Dun First Nation (NNDFN), Yukon Government and NCY to administer the BA and to facilitate communication and problem resolution among parties to the BA. Northern Cross Yukon Total Capital Expenditure NCY s capital expenditure during the period of October 2013 through to April 2014, which represents the seismic program totalled approximately $19,250,000. The majority of spending occurred during the tenure of the BA and is broken down in the following illustration (Fig. 1): Figure 1: Total capital expenditure of Northern Cross Yukon s Exploration project broken down by sector Benefit to Yukon Citizens and Business By way of the Community Liaison Officer, NCY coordinated with the VGFN Human Resource Department and other agencies to undertake recruiting in various communities to work on the seismic project. 1

2 Employment fairs were held in Old Crow, Mayo and Whitehorse prior to commencement of the seismic operation. As part of the commitments under the terms of the BA, NCY contributed to various training and economic development initiatives. NCY contributed $25,000 to the VGFN Youth Investment Fund and $25,000 to the VGFN Technical Training Trust and $4,950 to the NNDFN Business Trust for the purposes of education and training in the Oil and Gas Industry. Within the Yukon there is limited or no capacity to provide the full spectrum of oilfield services required in this seismic program, NCY believes it was quite successful providing employment and business opportunities in the areas of camp catering and maintenance; seismic line slashing and clearing; seismic shot hole drilling; wildlife monitoring; communication and logistics; and transportation and fuel supply by Yukon citizens and businesses. Over 22% of the total expenditure, or $4,408,067, was for the benefit of Yukon citizens and/or businesses. The following bar chart (Fig. 2) summarizes all Yukon value of employment and all goods and services purchased through Yukon based companies. The payroll benefit of Yukon citizens hired by our seismic contractor, GeoTir, is included in these amounts. Figure 2: Total capital expenditure benefitting Yukon Citizens and/or Businesses broken down by sector In total, NCY employed 50 Yukon Businesses in the execution of its seismic program (see page 4). 2

3 Yukon Employment During the period of October 2013 through to March 2014, on average 29%, or approximately 2,249 of 7,890 total project person days of the total employment in NCY s seismic program was provided to Yukon Citizens. This is based on the ratio of total Yukon Citizen person days to total person days of all employed workers (Figs. 3, 4 & 5). Figure 3: Percentage of Yukon citizen workdays to total workdays broken down per month Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 TOTAL Yukon Citizen Person Days Overall Person Days Yukon Citizen Percentage % 27% 45% 40% 32% 23% 16% 29% 3

4 Yukon-based Organizations that Participated in Northern Cross Yukon s Seismic Project COMPANY Northern Cross Whitehorse Office River s Edge Partnership Seismic Contractors Air North Alkan Air Arctic Tire Caribou Wild Outdoor Services Challenger Construction Fireweed Helicopters Fleming Protection & Security Inc. Graf Landscaping/Brushcutting Great River Aviation Ltd. Groundtruth Exploration K & K Truck Rentals Matrix Research Ltd. Small's Expediting Services Total North Trans North Helicopters VGFN Yukon Water Services Yukon Wide Adventures Yukon Travel/Hotels (paid by NCY) YUKON ACKLANDS AIR NORTH AJAX ARCTIC INLAND ARCTIC TIRE BEN'S ELECTRIC BEST WESTERN GOLD RUSH EAGLE PLAINS HOTEL EAGLE PLAINS SUPPLIERS ERS GENERAL WASTE GRIFFITHS GUILLEVIN HIGH COUNTRY INN SERVICE Head Office Rental & Services Recording //Drilling s Wildlife Monitoring/Maintenance Supplies 4

5 INDUSTRIAL ELECTRIC JACOBS INDUSTRIES KLONDIKE MOTORS KLUANE FREIGHTLINES MACPHERSON RENTALS REID HAINES SMALL'S EXPEDITORS SUPERIOR PROPANE THE ELDORADO HOTEL TOTAL FIRE TOTAL NORTH WHITEHORSE MOTORS YUKON PUMP LTD YUKON FINANCE Fuel AFD YUKON Propane Communication Government Fuel First Nations Employment & Training TOTAL CONTRACTORS Personnel GEOTIR GWRL M&M TESLA UNITY VGFN Other First Nations Local Yukon TOTAL Figure 4: Number of First Nations and Local Yukon Personnel Employed on NCY Seismic Program Through communications with Cindy Dickson (Northern Cross Yukon), Loretta Itsi (VGFN) and Pat Titus (NNDFN), a posting for seismic job positions for the Northern Cross Eagle Plains 3D seismic program was distributed through the communities of Old Crow and Mayo, Yukon. A group of VGFN from Old Crow expressed interest in working on the program as chainsaw operators, line crew members and general laborers. Training was conducted in Old Crow on October 7 th, 2013 to October 9 th, There was no response or interest in work from the citizens of Mayo. GeoTir posted job advertisements for the Eagle Plains 3D program in local newspapers and on local radio channels in Whitehorse, Yukon and surrounding areas. Arrangements were made between Valerie Topolniski (GeoTir) and Dorothy Frost (VGFN) to conduct a training session in Whitehorse on November 27 th and 28 th, In total, fifteen VGFN participants and four other Yukoners completed their WHMIS, St John s Ambulance Emergency First Aid with AED training, and a computer based Bear Awareness and H2S Aware courses. Valerie Topolniski was the instructor or facilitator for all four courses. All course 5

6 materials were provided by GeoTir. On November 30 th, 2013 and December 15 th, 2013 two Yukoners working as Wildlife monitors completed their First Aid course through an outside party. On January 26 th, 27 th and 31 st 2014, Robin Spooner (Great West Resources) instructed a snowmobile certification course at the staging area of the seismic program on site. Eight Yukoners, five VGFN and one other FN person attended. On March 10 th, 2014, John Courchesne (QST) instructed an Enform Level 1 Chainsaw basics course at 325. The course consisted of four, two hour classroom sessions and two days of in-field training. All participants were provided PPE and chainsaws by NCY and seven Yukoners and two VGFN people participated. Conclusion The November 4 th, 2013 BA was the second agreement of its kind under which NCY conducted operations. While there were some learning curve issues to manage, overall the administration of this agreement went rather well. The oil and gas industry is not well developed in Yukon so there are limitations in the capacity and the ability of Yukon businesses and citizens to participate in the full spectrum of opportunities available. During an exploration program, which by its nature is a series of activities undertaken in an intermittent sequence with uncertain outcomes, it is unreasonable to expect Yukon businesses and individuals to commit to broader participation in the exploration activities. Considering this constraint, NCY believes that it made available significant opportunities to Yukon businesses and citizens to participate in the initial seismic phase. In areas identified by NCY as being within the capacity and competence of Yukon businesses and citizens, participation was high and experience obtained was maximized. If the exploration work at Eagle Plain graduates to resource development, NCY expects Yukon involvement to increase. Of the 50 suppliers of goods and services, the majority performed extremely well and NCY expects to use them again in the future. Although there was general success in implementing the provisions of the November 4 th, 2013 Benefits Agreement, NCY notes that there were times when Yukon businesses were unable or unwilling to respond to solicitations for goods or services. In other instances, Yukon contractors delivered equipment that was either not fit for purpose or poorly installed which resulted in delays and extra costs. Of significant importance to NCY is workplace safety. It is a concern that there is a more relaxed attitude of some Yukon service providers to workplace safety. There were situations where contractors sent personnel improperly trained or outfitted to attend the NCY worksite. In other situations, NCY had to provide personal protection equipment to Yukon contractors to allow them to work at the site and comply with both Occupational Health and Safety Regulations and NCY s own HS&E policies. 6

7 For future Benefit Agreements, the template of the November 4 th, 2013 BA is solid and proven to be workable in an exploration program. Refinements to future BA s should focus on contract tenure, ideally to make for longer duration to mitigate frequent and lengthy negotiations. Oil and gas exploration in Yukon has many challenges to manage. As NCY and Yukon based businesses gain experience, many of these start-up issues should disappear. In the meantime, NCY is committed to providing benefits to Yukon and will continue to offer training and on the job experience with the view of establishing a competent and reasonably comprehensive oil field service industry in Yukon. The First Nations and Yukoner work effort in this seismic program was very good and overall contributed to NCY achieving a successful project outcome that was on time and on budget. 7