Canada's second-biggest oil producer, Suncor Energy (SU.TO), has signed a memorandum of understanding with Fort McKay First Nation to assess a potential oil sands lease on the Indigenous community's land, the First Nation and company said on Thursday.
WHY IT'S IMPORTANT
Some First Nations like Fort McKay, located 50 km (31 miles) north of Fort McMurray in northern Alberta, have become involved with oil and gas development on their lands to attract jobs and revenues, while others oppose such projects for environmental reasons.
Suncor's Base Plant and Syncrude have been operating for decades and are the oldest mines in the oil sands. The agreement could give Suncor an option for additional supply after 2040 as Base Plant nears the end of its life in the mid-2030s.
KEY QUOTE
"With this agreement, we are creating the conditions for sustainable prosperity, growth and health for our nation for generations to come, while leading the way on protecting our land and water,” said Fort McKay Chief Raymond Powder.
CONTEXT
Canada, the fourth-largest global oil producer, produces most of its crude from the oil sands in an energy-intensive process involving either mining or steam injection.
Suncor, like other major oil sands producers, is working to reduce high greenhouse gas emissions from production and has set a goal of reaching net-zero emissions by 2050 through projects such as carbon capture.
WHAT'S NEXT
Suncor is conducting early-stage technical and commercial feasibility assessments to determine the quality and quantity of recoverable ore on the Fort McKay land.
