It is time to update an article I wrote in
May 2013. In that article I listed the following six
conditions for Quebec to become an oil producer. This update
applies to oil as well as gas.
1. Oil and Gas. Two
juniors, Junex Inc.and
Inc., continue to explore. Press releases recently
issued by them regarding their activities in the Gaspé
Peninsula are positive. The Gaspé oil and gas play
has one great advantage: it involves naturally fractured rock and
does not require fracking. Status: More work required
but recent findings are encouraging and both Junex and Petrolia
hope to commence some commercial production at the end of
3. Adequate Laws.
Quebec's Ministry of Natural Resources has commissioned an
inter-ministerial strategic environmental study of hydrocarbons.
The study is expected to be completed shortly and its findings will
be referred to in the drafting of Quebec's hydrocarbon law,
which is expected to come into force early 2016.
Status: In progress.
Approvals. In the last two years,Quebec has adopted a
number of technical regulations and directives aimed at oil and gas
exploration and production. The purpose of the regulations and
directives is, among other things, generally to remind industry of its environmental obligations,
protect water sources, and identify hazardous drilling residues.
Status: The current interim regime is able to authorize
exploration activities, but will be finalized when the Hydrocarbon
Law comes into force.
5. Oil and Gas
Prices. Oil and gas prices are relatively low. But Junex
and Petrolia are confident that production costs in the
Gaspé Peninsula are well below current prices. Both juniors
estimate their per barrel oil production costs to be $25 or less.
Status: Ready but to be confirmed once production
6. Third Party
Agreements. Quebec's Ministry of Natural Resources
should be putting the final touches to its guidelines regarding social acceptability. It
is widely anticipated that one of the cornerstones of such
guidelines will be to ensure that local communities and First
Nations directly benefit from projects. To date, this has been
achieved contractually, a practice that is expected to continue.
Most of these agreements are likely to be made public and are
subject to certain minimum requirements imposed by Quebec.
Status: Ready but subject to
Careful not to repeat past mistakes, Quebec wants to proceed
step by step and in a focused fashion. Current projects being
favoured by Quebec and its investee companies (i) do not involve
fracking, (ii) are located away from population centres, and (iii)
provide demonstrable benefits for local communities. The purpose
here is to demonstrate that oil and gas can be developed
responsibly. Quebec hopes that, over time, industry will be able to
create a constituency for further and more diverse oil and gas
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).