O I L & G AS
article
First Nation
Lender Targets
Oil&Gas By Bobbi-Sue Menard
F
irst Nations access to lending institutions has been a concern for decades. While the main stream financial sector is cautiously expanding services to First Nations consumers there are other lending institutions with the experience and ability to help First Nations entrepreneurs advance their businesses. In 1988 the Indian Business Corporation (IBC) was launched with seed money from the federal government as a small agricultural lender for Alberta First Nations. IBC works with small to medium sized First Nations enterprises in Alberta and loans some $3 million per year to entrepreneurs. Owned by bands who are signatories to Treaties 6, 7 and 8, IBC does about 95% of its business within the province. “We are certainly an arm’s length organization,” explains Rob Rollingson, IBC General Manager. “We have a board of trustees and base our lending decisions and corporate decisions on financial reasons. We are a for-profit business.” Since then, the company has expanded its mandate. About half their loans are still done for agriculturebased businesses and the other half are for small businesses in a variety of sectors. The IBC Energy division works to establish opportunities in the oil and gas sector. All loan holders are required to hold a status card. In the oil and gas sector one of IBC’s success stories has been working with fluid haulers on the Frog Lake reserve, one of the Treaty 6 First Nations. It lies about two hours east of Edmonton. IBC has financed trucks for hauling heavy oil off reserve and has been a part of the creation of multiple on-reserve jobs. News about investors willing to provide loans and create businesses in a community travels fast, says 34 DECEMBER 2010 • NATIVE BUSINESS DEVELOPMENT MAGAZINE
Rollingson. “Word of mouth travels quickly. If you finance one individual’s truck on a nation, you find there are other people looking for opportunity.” Frog Lake reserve haulers are employed by Gibson Energy, which contracts six operators to haul fluid trailers to off-reserve destinations. Gibson Energy is a midstream oil and gas company out of Calgary, meaning that it processes, stores and transports crude oil and gas products. Gibson Energy specializes in delivering petroleum products through diverse infrastructure including a fleet of 1,900 trucks. Gibson’s other pursuits include the Moose Jaw Refinery, MP Energy and Canwest Propane. Gibson Energy launched a joint venture with Frog Lake Energy in May of this year to facilitate the creation of on-reserve job opportunities and businesses. “This is pretty much the purest form of a joint venture. In this project there was a joint contribution of assets,” explains Rod Bantle, Senior VP for Truck Transportation at Gibson. Gibson provides training and supervision for contractors and employees on reserve, while individual members are able to take advantage of the job and business opportunities created by the agreement. Joe Dion, President of Frog Lake Energy Resources, which is wholly owned by the Frog Lake First Nation, says the arrangement has allowed for individuals to make a good living as hauling contractors. “This has been a very successful partnership,” says Dion. About 2,000 barrels per day are hauled from Frog Lake for Gibson. “Most of the guys from Frog Lake are operators, but we encourage our people to get trained up, because we do a lot of hiring in the corporate sector too,” says Dion. It is situations like the joint venture between Gibson and Frog Lake that has Rollingson confident about the security of loans made to First Nations looking to do business. “There is still so much opportunity for First Nations in the oil and gas sector in Alberta.” It is worth noting IBC managed to maintain their