Advertisement

Quebec plans oil exploration program

QUEBEC CITY, Feb. 14 (UPI) -- Quebec plans to partner with private sector interests in an oil exploration program on Anticosti Island in the Canadian province.

"These agreements with private sector partners will create sustainable wealth and quality jobs if the presence of oil is confirmed," Premier Pauline Marois stated in a news release Thursday announcing two agreements.

Advertisement

The first is a $100 million drilling program with Petrolia Inc., based in Quebec, and Nova Scotia's Corridor Resources, as well as France's Maurel & Prom, in which the province, through its government agency Resources Quebec, would invest $70 million in return for a 35 percent stake.

Under the second preliminary agreement, with Junex, based in Quebec, the province "and an operator yet to be determined" would fund an exploration program of $90 million, with the province getting at least 40 percent of the joint venture.

Each of the two exploration programs will be conducted in two phases -- the first to determine the type and quantity of hydrocarbons present, and the second to determine whether the operation is economically viable, the government said.

The first phase of the program is expected to begin this summer.

Advertisement

Quebec, through Resources Quebec could end up investing as much $115 million in the next two years, depending on the results of the drilling, the Montreal Gazette reports.

If the project is successful, the government said, the economic benefits to the province could be as much as $45 billion over 30 years, in the form of royalties, taxes and returns on equity.

"The predominant involvement of the state will also ensure safe development and advantageously position the government to agreements for possible exploitation, ensuring a fair return to Quebecers," said Nicolas Marceau, the province's minister of finance and economy, in the release.

While estimates differ, it has been estimated there are between 30 billion and 50 billion barrels of oil initially-in-place on Anticosti Island, of which perhaps 5 percent could be recoverable, the Financial Post reports. That compares with Alberta's oil sands, in which production averaged 1.9 million barrels of crude per day in 2012.

"Today, Quebec asserts its rights over natural resources owned collectively and must benefit all Quebecers," the premiere said in her announcement. "My government is committed to taking action to promote energy independence for Quebec."

The Canadian Association of Petroleum Producers, based in Calgary, welcomed the announcement.

Advertisement

"Eastern Canada currently imports about 800,000 barrels a day, and Quebec oil production would help offset those current oil imports, create Quebec jobs and generate government revenue," Janet Annesley, spokeswoman for the association, was quoted as saying by the Globe and Mail.

Latest Headlines