Canadian First Nation sends notice of opposition to Obsidian Energy drilling plans

By Nia Williams

(Reuters) - A Canadian First Nation on Wednesday said it has told the Alberta Energy Regulator that oil and gas producer Obsidian Energy cannot proceed with plans to expanded drilling on its territory due to concerns about earthquakes.

The Woodland Cree First Nation in northern Alberta criticized Obsidian earlier this week for failing to address the Indigenous community's concerns about a series of earthquakes that regulators found were caused by the company's wastewater disposal.

Calgary-based Obsidian produces roughly 31,000 barrels of oil equivalent per day (boepd). Around 20% of output comes from the company's Peace River assets in northern Alberta, some of which are located within Woodland Cree territory.

Obsidian plans to increase production by 12% this year and focus most of its drilling program on the Peace River region, according to a company presentation.

"CEO Stephen Loukas and Obsidian have not met the basic legal requirements necessary to proceed with development on our territory," Woodland Cree Chief Isaac Laboucan-Avirom said in a statement.

In recent days, Woodland Cree community members have started establishing "monitoring camps" across their territory to safeguard their land from Obsidian oil development that the Nation has not authorized, the statement said.

Obsidian appealed the regulatory order issued last year that found it was at fault for the earthquakes.

In a statement released late on Tuesday, Obsidian CEO Loukas said negotiations that started last year over a new economic relationship agreement with the Woodland Cree had broken down.

"We have unfortunately reached a negotiating impasse with WCFN’s senior leadership," Loukas said.

Obsidian can use existing regulatory processes to obtain the permits and licenses needed to execute its three-year Peace River growth plan and accelerate growth in other Peace River locations, he added.

(Reporting by Sourasis Bose in Bengaluru; Editing by Shinjini Ganguli and Jonathan Oatis)