Quebec Passes Hydrocarbon Bill That Opens Oil and Gas Reservesby and
Bill 106 passes after late-night debate in National Assembly
Energy company shares had jumped in anticipation of passage
Quebec passed hydrocarbon legislation that is likely to open up shale gas and oil reserves to energy companies operating in the province.
Bill 106, introduced in June, passed by a margin of 62 to 38. It creates a new agency to promote Quebec’s transition to cleaner energy but also includes the Petroleum Resources Act, which may clear the way for more exploration.
Shares of companies that hold exploration rights, including Calgary-based Questerre Energy Corp. and Junex Inc., based in Quebec City, surged in heavy trading last week as passage of the legislation looked likely. Questerre holds about 1 million acres and has drilled test wells in the Utica shale formation along the St. Lawrence River, according to its website.
Questerre’s shares rose the most in more than eight years on Thursday and inched up again on Friday. Junex’s stock increased 30 percent, the most in almost two years. The company announced last month that its Galt No. 4 horizontal well has produced a total of 17,798 barrels of light, sweet crude oil in the province.
Bill 106 106 establishes a system for licensing and authorizing the exploration and production of oil and gas, which had been governed by the province’s Mining Act. It also creates an energy transition fund for the payment of petroleum royalties.
Passage of the bill was “a necessary and critical pre-condition” for oil and gas exploration in Quebec, Questerre Chief Executive Officer Michael Binnion said in an interview Thursday.
While Canada’s National Energy Board doesn’t record Quebec as producing any marketable hydrocarbons of its own, the province holds enough gas alone to meet its own needs for about 100 years. Most is locked up in the Utica shale formation along the St. Lawrence River or in deposits beneath Anticosti Island, according to the Canadian Association of Petroleum Producers.