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December 2020

2020 – 2021 Holiday Message from your Board of Directors
PJVA Luncheon – November 12, 2020
JV Certificate Program - Analyst 1 course – begins January 5!
Canadian indigenous deal with KXL oil pipeline took years, aims to unlock long-term wealth
Healthy oil & gas sector key to Canadian environmental innovation & economic success: Q&A with Jack Mintz
Remembrance Day 2020

2020 – 2021 Holiday Message from your Board of Directors

Wishing you and yours the best of the Holiday Season. Looking back on the year 2020, it may seem difficult to find many things to be happy and excited about. For us, we have stayed focused on looking for new ways to provide our services to the membership, and beyond. In that regard, mid-November saw PJVA take part in a joint educational series with CAPLA and CAPL. We will continue to work with our friends in CAPLA and CAPL on many more collaborative events well into the future. We are Stronger Together!

PJVA is hosting a virtual Christmas Gala on December 11 at 6:30 pm. This is not your average Zoom™ meeting. There will be food, entertainment and more! Please join us and let us celebrate the season together. More details are available on our website at pjva.ca.

2021 holds unlimited opportunities for PJVA, and our friends at CAPLA, CAPL and other associations, to collaborate. Those opportunities will provide new growth and a rejuvenated spirit to PJVA and we urge our members to seize these opportunities and make the most out of them for both their professional development and personal growth.

For any questions about volunteering or participating in any events throughout the year, do not hesitate to contact any Board member or email pjva@pjva.ca.

It is n honor and a privilege to serve you. Have a very Merry Christmas and Holiday Season and cheers to a bright and exciting new year; let us make it a great one!

Sincerely,
PJVA Board of Directors

PJVA Luncheon - November 12, 2020

On November 12th, the PJVA Luncheon was with Toni Cioni, Cito Law Co-Founder, former partner at Torys LLP. His presentation was "Going International - As Covid19 and oil price shocks drive reserves of global O&G assets for sale, are there international opportunities for Canadian companies?”.

The presentation answered the question that as global demand recovers and the Canadian companies face increasing regulatory complications and cost, does it make sense for Canadian companies to operate abroad to serve global demand with O&G sourced from outside Canada?

While some companies are divesting low-priority assets, others are considering whether this may be the right time to acquire assets at a low price outside Canada. Canadian capital faces the need to seek other markets to ensure a return with the most important aspect of doing international deals being about the relationships as well as about the finite legal terms.

Peter Mitchelmore
PJVA Newsletter Editor

PJVA JV Certificate Program - Analyst 1 course
begins January 5, 2021

Joint Venture Analyst Certificate
Prerequisite: Successful completion of the JV Administration Certificate above

Course Name	Schedule	Pricing
Joint Venture Analyst Level 1 (25 hours)	Reading Week Dec 14 Classes run Jan 5 – Feb 4, 2021 Tuesdays, Thursdays Times: 4:30 pm – 7:00 pm	Members $545 +gst Non-members $575 +gst
Joint Venture Analyst Level 2 (25 hours)	Reading Week Feb 16 Classes run Feb 23 – Mar 25, 2021 Tuesdays, Thursdays Times: 4:30 pm – 7:00 pm	Members $545 +gst Non-members $575 +gst
Introduction to Facilities (12 hours plus exam)	Reading Week Apr 5 Classes held: Apr 12, 13, 14, 15 Times: 1:00 pm – 4:00 pm Exam - Thur, Apr 22, 2021 Time: 1:00 pm	Members $545 +gst Non-members $575 +gst

Canadian Indigenous Deal with KXL Oil Pipeline Took Years, Aims to Unlock Long-Term Wealth

*Published by EnergyNow Media, November 30, 2020

WINNIPEG, Manitoba (Reuters) – TC Energy Corp’s sale of a C$1 billion ($769 million) stake in Keystone XL (KXL) to a Canadian indigenous group is the result of over three years of pressure from a tiny Saskatchewan First Nation that demanded part ownership of the long-delayed oil pipeline, rather than short-term payments for allowing it to be built through its lands.

Natural Law Energy’s (NLE) planned investment was billed by TC as the biggest-ever indigenous investment in an oil project, highlighting how some communities are seeking to share in the industry’s profits while others oppose it.

Adding indigenous support may help efforts by Canada and TC to convince U.S. President-elect Joe Biden not to revoke the permit of the $8-billion Keystone XL when he takes office as he has promised.

If they are successful, millions of dollars will flow over a generation into indigenous communities to help youth afford university or pay for business investments, said Chief Alvin Francis of Nekaneet First Nation in Saskatchewan, one of five involved in NLE.

“It’s about making life better for all of our youth,” Francis said.

“If I could meet Joe Biden I’d say, ‘This a chance for you to change my First Nation’s view of the world.’”

TC proposed KXL 12 years ago and the project has since run into a steady series of legal and political obstacles, opposed by some U.S. tribes, landowners and environmental activists.

Nekaneet, a community of about 540 people, has never been involved in a deal of this scale, having previously developed a strip mall.

It joined four First Nations – Ermineskin, Akamihk, Louis Bull Tribe and Little Pine – to form NLE. The coalition has attracted interest from banks in financing TC’s project, given that much of its shipping capacity is already under contract, said NLE director Brian Mountain. He declined to identify the banks.

“What we’re doing is creating intergenerational wealth,” Mountain said. “NLE is talking with Alberta Indigenous Opportunities Corp, a provincial corporation, about guaranteeing some of the loans’”

Spokespeople for Canada’s six big banks declined to comment or did not respond. There is precedent for banks supporting indigenous investments in energy, such as a C$545 million bond issue for two bands in 2017 to invest in a Suncor Energy Inc storage facility.

Financing is set to close in the third quarter next year, likely well after Biden clarifies his position on KXL, easing risk for the First Nations, said Ken Coates, a professor of public policy at University of Saskatchewan.

Francis said while there is risk Biden will quash KXL, he is optimistic his position will soften.

LONG-TERM DEAL

He said he asked TC in 2017 for a benefits-sharing agreement that would last KXL’s lifetime. TC balked, but in late 2019 it contacted Francis and asked if Nekaneet would buy a stake. That began a year of negotiations and development of the coalition.

“Under the deal, TC would give NLE a stake and pay it a prescribed annual return in exchange for NLE raising funds and investing them in KXL,” Mountain said.

NLE would use the proceeds to repay loans for its investment and provide cash to its First Nations for 30 years.

The payments will be based on KXL’s revenues. Mountain and TC declined to estimate the payments’ value and TC did not confirm NLE’s account of the deal’s structure, saying it was confidential. For TC, the investment allows the company to tie up less of its own capital, after recently selling a stake in its Coastal GasLink pipeline to private equity.

“The partnership reflects TC’s commitment to sharing KXL’s benefits with indigenous communities in both Canada and the United States,” company spokesman Terry Cunha said.

Some oppose new pipelines for the toll fossil fuels have on the environment. “Destroying the planet to make money is unconscionable, no matter who is making the money,” said Steve Volker, lawyer for U.S.-based Indigenous Environmental Network. ($1 = 1.3000 Canadian dollars)

*The newsletter may contain material sourced from to third party websites. The material is provided solely as a convenience to you and not as an endorsement by PJVA of the contents on such third-party Websites. PJVA is not responsible for the content of third-party sourced material and does not make any representations regarding the content or accuracy of materials on such third-party Websites, or the availability of such Websites. If you decide to access third party Websites, you do so at your own risk

Healthy Oil and Gas Sector Key to Canadian Environmental Innovation and Economic success: Q&A with Jack Mintz

*Written by Deborah Jaremko and published by EnergyNow Media, November 13, 2020

‘Oil and gas helps keep our energy costs down and it’s very reliable source of energy’

Canadian economist Jack Mintz, president’s fellow at the University of Calgary’s School of Public Policy. The Canadian Press

New research by the Canadian Energy Centre found that Canada’s oil and gas industry contributed $493 billion in revenues to governments across the country between 2000-2018, or an average of $26 billion per year. Canadian economist Jack Mintz, president’s fellow at the University of Calgary’s School of Public Policy, shared his perspective on the value of oil and gas to Canada’s economy, current and future.

Highlights:
The world could face oil shortages by the end of this decade because of reduced investment in new production

Reduced oil and gas development in Canada would result in a lower Canadian dollar, which would make Canada less attractive for investment and employment

People in Canada’s energy sector have the scientific knowledge to get to a low-carbon society without excessive economic costs

CEC: How would you describe the economic and financial contribution of Canada’s oil and gas provinces to the Canadian economy?

Mintz: It’s significant. It’s the largest net export item we have as a country, plus, oil and gas produces the most output per working hour of all the sectors in Canada. With all the suppliers working for the industry, it helps generate a lot of income and a lot of taxes are paid for the Canadian government as well as the provinces, [particularly] Alberta, Saskatchewan, and Newfoundland and Labrador.

Its products are also used throughout the economy, because people still need to drive cars and they still need oil and gas products to pave highways, and they need oil and gas products for petrochemical plants so that we can have all sorts of plastics, which are in constant use by people all the time.

CEC: What do you think Canada would look like today without its oil and gas sector?

Mintz: If we didn’t export oil and gas as we’re currently doing, we would have to depreciate the Canadian dollar, which some people think is great for manufacturing but it’s not, because if we have a lower dollar then people would look at Canada as less competitive for investment. With a much lower Canadian dollar, we’d be poorer in the sense that Canadian salaries in foreign currencies (e.g. U.S. dollars) would be much lower. There could be a brain drain where we’ll lose people to other parts of the world if we’re not careful.

We would also have to be importing a lot of the oil-based product that we need, which would be potentially more expensive. It would also mean that Canada would have a smaller economy. The exchange rate is very important in terms of measuring how rich we are as a country and the depreciating dollar is not a good thing from the point of view of our ability to buy goods and services from abroad. Once our dollar falls, we are basically impoverishing ourselves.

CEC: What role do you think oil and gas should play in Canada’s long-term future?

Mintz: We forget that reserves deplete roughly six to seven per cent per year, so that means that of the hundred million barrels per day of supply we have today, the reserves next year will only support 93 million barrels per day unless you bring new reserves into supply. At the same time, we’ve seen a very significant reduction in investment in the oil gas sector since 2014, and particularly during this COVID period. It’s well possible that we’re going to be facing oil and gas shortages by the end of this decade, mainly because of the lack of investment throughout the world and particularly in Canada, where oil and gas investment has even fallen more than we’ve seen elsewhere.

When you look at what’s being called for by governments in terms of moving to zero net emissions by 2050, there really isn’t a feasible plan yet. There’s ideas about how to get there, like the adoption of more nuclear energy [and] the use of more renewables. But in almost every plan that I’ve seen there’s still a very significant role of oil and gas, even if every light vehicle is electric, you still need oil and gas for transportation like shipping, aviation, long-haul trucking and railways because there isn’t a substitute at this point. You also need oil and gas for industrial processes, and plastics are going to be growing if anything.

There’s going to be a number of technologies needed to get a low carbon society. That’s why I think oil and gas has a future. Anyone who thinks that you can just eliminate the sector today and somehow we’re going to get all our energy needs — plastics, materials, chemicals and things like that, that we need just to operate — is not particularly realistic in terms of what can be achieved.

I think in the end we’re going to have to rely on [a variety of] different sources to some extent and hope to have the kind of innovations that would allow us to reduce carbon quite extensively, and in the cheapest way possible.

CEC: Is it important for Canada to have a healthy oil and gas sector?

Mintz: Most of the forecasters expect that oil and gas production will expand in Canada, less rapidly than the past, in the next 30 years. That’s because it’s still going to be needed internationally to be part of the overall supply.

Oil and gas helps keep our energy costs down and it’s very reliable source of energy. And at the same time, with new innovations which reduce greenhouse gas emissions, which is happening. People in the energy sector have the scientific knowledge to get to a low-carbon society without excessive economic costs.

Remembrance Day

At 11:00 am on November 11th, it was exactly 102 years after the armistice, which led to the end of World War One and the treaty of Versailles was signed. Many individuals have served the country honourably in many conflicts for over 102 years, we thank them for their service and keep them in our memories.

Since World War One ended, the Canadian oil and gas sector has provided fuel during times of war and peace. Hopefully, economic recovery from the pandemic take place in 2021, and will continue to be powered by the Canadian oil and gas sector using PJVA model agreements.