Euromoney: Energy development brings boost for tribal nations

Friday, October 7, 2011  

"Tribal Nations in the US, with a population of just 2 million, control about 55 million acres. The reservations allotted to them were chosen because the land was rocky and considered to be unsuitable for farming and therefore of little value. With little help from the US government, unworkable land, no tax base and little integration with modern society, many of the Native Americans have the worst standard of living in the US. "People think they are making money from casinos, but that is rarely the case," says an oil investor. One in four Native Americans is in poverty. Unemployment rates on reservations can be as high as 75%. Substance abuse and suicide rates are much higher than the national average.

Unbeknown to the decision-makers, however, the rocky lands Native Americas were allocated have proved rich in oil and gas. In some ways, says John Jurrius, chief executive and founder of Native American Resource Partners (Narp), the Tribal Nations are having the last laugh. Jurrius’s firm is funded by a $5 billion private equity firm, Quantum Energy Partners. With the capital injection, Narp works with Tribal Nations to establish a joint energy company that can give a return of as much as 500% to Quantum Energy and its institutional end-investors, while ensuring the Tribal Nations are fully compensated for their resources. Jurrius and the other senior members of Narp all formerly worked in the oil and gas industry. In the 1980s Jurrius began partnering with the Southern Ute Tribe in Utah, working on the tribal council and with financial investors to develop natural gas resources, and create a financial plan and growth fund for the tribe, generating hundreds of millions of dollars in long-term commercial revenue.

It’s a new direction for investing in oil and gas production – a sector not renowned for marrying profits with ethics. "By having a joint company it means the tribes are proactively developing their resources, rather than being limited to their historically passive role of receiving lease income while industry takes most of the income streams from resource developments on reservations," says Jurrius"

Get the Story:
Oil boom brightens Native Americans' prospects ‎ (Euromoney Magazine October 2011)