Imperial Oil hasn't posted $178M cleanup deposit for Norman Wells field

Energy giant Imperial Oil hasn't given the federal government the $178-million environmental cleanup deposit for the declining Norman Wells oil field one year and six monthsafter it was ordered.

The news comes after Imperial Oil's Sept. 9 announcement that it is seeking buyers to take over its two-thirds interest in the decades-old field, which is an estimated five to 10 years away fromclosure.

"We have some measure of faith in Imperial Oil as a long-time corporate citizen and of course in the one-third partner in this field, our federal government," said Nathan Watson, the mayor of Norman Wells, on Friday via email.

"That's not to say we aren't concerned by this news. We of course are, as muchand indeed more sothan anyone else."

Watson said a meeting this week with Imperial Oil will partly address the company's cleanup obligations.

Valerie Hache, a spokesperson for the Department of Indigenous and Northern Affairs Canada, said it's"seeking to conclude exchanges with Imperial Oilover the appropriate form of security."

"We are working with the federal government on a proposal we have put forward to meet security requirements under the regulations," echoedLisa Schmidt, a spokesperson for Imperial Oil.

On Thursday, the company was scheduled to meet with representatives of the Sahtu Secretariat Inc. to discuss the cleanup.

The secretariat's chairperson, Ethel Blondin-Andrew, could not be reachedfor comment afterwards about the missing security.

Company not under any deadline

In March2015, the Sahtu Land and Water Boardordered Imperial Oil to provide $178 million in security for the oil field, in addition to the $2 million (in the form of an irrevocable letter of credit)already held by INAC.

But Imperial Oil hasn't broken any laws in not posting the extra security. The Mackenzie Valley Resource Management Act, which governs securities, doesn't spell out a timeline; it just calls on the company to "furnish and maintain" the security.

While the company has posted losses in recent quarters as the price of oil continues to lag behind its previous high, a summary Imperial Oil provided to the land and water board two years ago cited the company's worth as$46 billion.

"I don't think anybody in the world realistically thinks that Imperial would just walk away from this and not pay for their bills," said Doug Matthews, an energy analyst and the former director of the N.W.T. government's oil and gas division.

"But I think from a publicity point of view, from a public perception point of view, it looks bad."

Matthews added that the news is particularly distressing sinceImperial Oil argued in 2014 (ultimately unsuccessfully) that the Sahtu Land and Water Board had no jurisdiction over the company's plan to clean up the field.