Showing posts with label Gastem. Show all posts
Showing posts with label Gastem. Show all posts
Wednesday, February 23, 2011
Dunderdale's Random Island Highway
Wednesday, December 15, 2010
In Case You Missed It
The government of Quebec is hard at it - trying to stop Newfoundland and Labrador from getting too much of the oil from Old Harry. The big question is how does the federal government enter into an offshore agreement with Quebec when the border dispute is unsettled? Can we expect another betrayal at the hands of our federal government? Is our provincial government going to stand up and let it be known we claim all of Old Harry in accordance with the Convention of the Seas - which our country has signed onto? There is absolutely NO time to waste in making our position clear. Or do we trust that our federal Natural Resources Minister, Christian Paradis, a Quebec MP, will negotiate with Ms. Normandeau taking into account our provinces' interests and claims. We must be on guard for a shady, and quick, back room deal here. The following news story came out today in the Montreal Gazette, but was not reported in any of our papers...
By Kevin Dougherty Gazette Quebec Bureau, Montreal Gazette December 15, 2010 5:02 PM
Quebec will ask the federal government for 100 per cent of the resource royalties from oil and natural gas developments in the Gulf of St. Lawrence, which could bring the province as much as $8.7 billion.
Natural Resources Minister Nathalie Normandeau emerged from a regular meeting of the Charest cabinet Wednesday to announce that the cabinet has given her a mandate to negotiate a royalty agreement with the federal government.
Several potential drilling sites have been identified in Quebec’s portion of the Gulf, but Normandeau admitted Quebec has been pushed to act by plans to start drilling on the Newfoundland and Labrador side of the disputed underwater boundary between the two provinces at a place called Old Harry.
Corridor Resources Inc. of Halifax wanted to drilled on Quebec’s side of the line, but cannot without an agreement between Quebec and Ottawa.
So Corridor will drill instead on the Newfoundland side.
Geologists estimate that there are about 2 billion barrels of oil in Quebec’s portion of Old Harry. But the deposit could also be natural gas or perhaps a salt dome.
“We want 100 per cent of the royalties,” Normandeau told reporters. “Our priority in the short term is Old Harry.”
The federal government, backed by a Supreme Court of Canada ruling, claims full ownership of Canada’s offshore resources. Quebec also claims full ownership of undersea gas and oil deposits.
Normandeau said reopening the constitution to resolve the dispute is a dead-end.
So, like Newfoundland and Nova Scotia, Quebec will seek an administrative agreement with Ottawa, which will leave the ownership issue unresolved.
Under the administrative agreements reached by the two Atlantic provinces, joint federal-provincial boards manage offshore hydrocarbons.
Normandeau said Quebec wants to collect all the royalties itself, without federal participation.
She said the fact Christian Paradis, a Quebec MP, now is the federal natural resources minister represents an opportunity to resolve the dispute.
“I would be totally irresponsible not to seize this opportunity,” the minister said.
Normandeau added that Paradis is expecting Quebec to make this offer and talks will take place at the “top level” between deputy ministers, but that she plans to get actively involved in the talks as well.
By Kevin Dougherty Gazette Quebec Bureau, Montreal Gazette December 15, 2010 5:02 PM
Quebec will ask the federal government for 100 per cent of the resource royalties from oil and natural gas developments in the Gulf of St. Lawrence, which could bring the province as much as $8.7 billion.
Natural Resources Minister Nathalie Normandeau emerged from a regular meeting of the Charest cabinet Wednesday to announce that the cabinet has given her a mandate to negotiate a royalty agreement with the federal government.
Several potential drilling sites have been identified in Quebec’s portion of the Gulf, but Normandeau admitted Quebec has been pushed to act by plans to start drilling on the Newfoundland and Labrador side of the disputed underwater boundary between the two provinces at a place called Old Harry.
Corridor Resources Inc. of Halifax wanted to drilled on Quebec’s side of the line, but cannot without an agreement between Quebec and Ottawa.
So Corridor will drill instead on the Newfoundland side.
Geologists estimate that there are about 2 billion barrels of oil in Quebec’s portion of Old Harry. But the deposit could also be natural gas or perhaps a salt dome.
“We want 100 per cent of the royalties,” Normandeau told reporters. “Our priority in the short term is Old Harry.”
The federal government, backed by a Supreme Court of Canada ruling, claims full ownership of Canada’s offshore resources. Quebec also claims full ownership of undersea gas and oil deposits.
Normandeau said reopening the constitution to resolve the dispute is a dead-end.
So, like Newfoundland and Nova Scotia, Quebec will seek an administrative agreement with Ottawa, which will leave the ownership issue unresolved.
Under the administrative agreements reached by the two Atlantic provinces, joint federal-provincial boards manage offshore hydrocarbons.
Normandeau said Quebec wants to collect all the royalties itself, without federal participation.
She said the fact Christian Paradis, a Quebec MP, now is the federal natural resources minister represents an opportunity to resolve the dispute.
“I would be totally irresponsible not to seize this opportunity,” the minister said.
Normandeau added that Paradis is expecting Quebec to make this offer and talks will take place at the “top level” between deputy ministers, but that she plans to get actively involved in the talks as well.
Saturday, December 11, 2010
Why Old Harry Belongs to Newfoundland and Labrador
The "administration line" dividing Newfoundland and Labrador's maritime economic zone and Quebec's is in dispute. At the heart of the dispute is the Old Harry sub sea oil/natural gas formation - a 29 km long aquifer of up to 2 billion barrels of oil and/or massive quantities of natural gas. The oil there is so plentiful that satellites pick up at least 6 natural oil leaks from the sea floor. Newfoundland and Labrador are already exploring it on the eastern side, but Quebec cannot start as it does not have an agreement with the federal government to proceed. One issue Quebec has is it's demand the federal government recognize it's sole jurisdiction to these waters - which the feds won't do. The other major problem is a lack of agreement over where the "administration line" is between the two provinces.
Quebec historically clings to the argument that an unofficial agreement in general between the Atlantic provinces and itself settled the boundary issue in 1964 - the so-called Stanfield Line. Newfoundland and Labrador has always challenged that boundary stating that not only was it general in terms, but that it was not ratified by an Act of Parliament as would be required under the Constitution. In actuality, the 1964 agreement was more an effort by the provinces to secure sub sea minerals (oil and gas) for themselves. The boundary issue was loosely agreed to in connection with this strategy. In 1967 the Supreme Court of Canada, in a constitutional reference on the matter, found that the seabed belonged to the federal government.
In 2001, Newfoundland and Labrador and the Province of Nova Scotia went to arbitration in order to establish the validity, or lack thereof, of the 1964 Stanfield Line agreement. The following is the finding of that group:
AWARD
For the forgoing reasons, the Tribunal unanimously determines that the line dividing the respective
offshore areas of the Province of Newfoundland and Labrador and the Province of Nova Scotia
has not been resolved by this agreement.
Hon. Gerard La Forest
Leonard Legault
James Richard Crawford
In other words, there is no agreement upon which any maritime boundaries could be established or recognized.
The old 1964 agreement had an administration line that essentially brought Quebec's maritime border all the way from the mouth of the St Lawrence to 80 kms east of the Magdelen Islands - a massive 350 kms or so. Without such an extension to encompass a tiny set of islands Quebec's maritime boundary would not surpass 50 km east of Anticosti Island into the Gulf. In reality, the Magdelen Islands actually lie more in Nova Scotia's waters than they do in Quebec's. There have been legal precedents set for small islands lying off the waters of another's jurisdiction, and not conforming to the natural coast line of the host jurisdiction. One in particular case, St Pierre and Miquelon Islands (France), is a very good example.
St Pierre and Miquelon Islands are the last territorial remnants of France's once great empire in North America - located just south of Newfoundland. In fact they are so close they are located within Canada's Exclusive Economic Zone (EEZ). Canada and France had been squabbling for many years over the territorial waters that such an island deserved, and the effects on Canada's EEZ. In 1992 it was finally submitted for binding arbitration with three neutral international panelists, and one each from Canada and France. In a three to two decision, the two being Canada and France, the committee decided that France kept a 22.5 km territorial sea surrounding the islands and an additional 22.5 km contiguous zone. It was only 18% of the claim that France had made. The remainder of the territory was to remain Canada's EEZ, with the exception of a small corridor to the open seas. The committee used a straight forward interpretation of the Convention on the Law of the Sea, which Canada was a signatory to.
Based on this very close example, The Magdelen Islands would only have a very small "territorial sea" surrounding them, and not essentially the entire Gulf of the St Lawrence. Quebec's "administration line" or maritime boundary would then stretch in a line following it's mainland coast, but encompassing Anticosti Island. The result of this alignment is that Old Harry is not actually situated in Quebec's maritime economic zone. Far from it. The same territorial sea argument can likely be made for Anticosti Island as well.
According to the Constitution, boundary changes between provinces themselves must be agreed upon by those provinces involved and then sent to the federal government for ratification. The federal government can arbitrate, but only if requested to do so by the affected provinces. Without a settlement of the boundary issue Quebec cannot form a joint board with the federal government to oversee and grant licences for offshore exploration and development. It is highly doubtful that Newfoundland and Labrador would subject themselves to that process. Although, if they did, precedents seem to indicate that Quebec would lose and Old Harry would belong to Newfoundland and Labrador. However, should Quebec continue to cut it's nose off to spite it's face, Newfoundland and Labrador might as well develop the east side of Old Harry and, as they say, oil has no borders.
What should be:
Quebec historically clings to the argument that an unofficial agreement in general between the Atlantic provinces and itself settled the boundary issue in 1964 - the so-called Stanfield Line. Newfoundland and Labrador has always challenged that boundary stating that not only was it general in terms, but that it was not ratified by an Act of Parliament as would be required under the Constitution. In actuality, the 1964 agreement was more an effort by the provinces to secure sub sea minerals (oil and gas) for themselves. The boundary issue was loosely agreed to in connection with this strategy. In 1967 the Supreme Court of Canada, in a constitutional reference on the matter, found that the seabed belonged to the federal government.
In 2001, Newfoundland and Labrador and the Province of Nova Scotia went to arbitration in order to establish the validity, or lack thereof, of the 1964 Stanfield Line agreement. The following is the finding of that group:
AWARD
For the forgoing reasons, the Tribunal unanimously determines that the line dividing the respective
offshore areas of the Province of Newfoundland and Labrador and the Province of Nova Scotia
has not been resolved by this agreement.
Hon. Gerard La Forest
Leonard Legault
James Richard Crawford
In other words, there is no agreement upon which any maritime boundaries could be established or recognized.
The old 1964 agreement had an administration line that essentially brought Quebec's maritime border all the way from the mouth of the St Lawrence to 80 kms east of the Magdelen Islands - a massive 350 kms or so. Without such an extension to encompass a tiny set of islands Quebec's maritime boundary would not surpass 50 km east of Anticosti Island into the Gulf. In reality, the Magdelen Islands actually lie more in Nova Scotia's waters than they do in Quebec's. There have been legal precedents set for small islands lying off the waters of another's jurisdiction, and not conforming to the natural coast line of the host jurisdiction. One in particular case, St Pierre and Miquelon Islands (France), is a very good example.
St Pierre and Miquelon Islands are the last territorial remnants of France's once great empire in North America - located just south of Newfoundland. In fact they are so close they are located within Canada's Exclusive Economic Zone (EEZ). Canada and France had been squabbling for many years over the territorial waters that such an island deserved, and the effects on Canada's EEZ. In 1992 it was finally submitted for binding arbitration with three neutral international panelists, and one each from Canada and France. In a three to two decision, the two being Canada and France, the committee decided that France kept a 22.5 km territorial sea surrounding the islands and an additional 22.5 km contiguous zone. It was only 18% of the claim that France had made. The remainder of the territory was to remain Canada's EEZ, with the exception of a small corridor to the open seas. The committee used a straight forward interpretation of the Convention on the Law of the Sea, which Canada was a signatory to.
Based on this very close example, The Magdelen Islands would only have a very small "territorial sea" surrounding them, and not essentially the entire Gulf of the St Lawrence. Quebec's "administration line" or maritime boundary would then stretch in a line following it's mainland coast, but encompassing Anticosti Island. The result of this alignment is that Old Harry is not actually situated in Quebec's maritime economic zone. Far from it. The same territorial sea argument can likely be made for Anticosti Island as well.
According to the Constitution, boundary changes between provinces themselves must be agreed upon by those provinces involved and then sent to the federal government for ratification. The federal government can arbitrate, but only if requested to do so by the affected provinces. Without a settlement of the boundary issue Quebec cannot form a joint board with the federal government to oversee and grant licences for offshore exploration and development. It is highly doubtful that Newfoundland and Labrador would subject themselves to that process. Although, if they did, precedents seem to indicate that Quebec would lose and Old Harry would belong to Newfoundland and Labrador. However, should Quebec continue to cut it's nose off to spite it's face, Newfoundland and Labrador might as well develop the east side of Old Harry and, as they say, oil has no borders.
What should be:
The 1964 Stanfield Line:
Sunday, December 5, 2010
Understanding Old Harry
In 2008 Corridor Resources, an exploration company, agreed to give up it's permit to explore the "Quebec side" of Old Harry - a 29 km long undersea basin of oil and gas. In that same year it signed onto a five year exploration permit with Newfoundland and Labrador. Corridor is fully involved in the Quebec on shore oil and gas exploration, including the Anticosti Island project.
Things in the oil and gas industry have changed in Quebec in the last little while. Prior to 2003 Hydro Quebec was functioning in it's usual state sponsored role as controller of the resources - including oil and gas. The Parti Quebecois, Quebec's separatist political party, had placed the rights for drilling and exploration in Hydro Quebec's hands. The purpose was to know doubt develop Quebec's oil and gas industry in a monopolistic, and state controlled fashion - not unlike their role as purveyors of hydro power. However, with the election of the Liberals in 2003 that function was to change drastically.
Hydro Quebec's role in the oil and gas industry was rolled back. Small junior exploration companies, with a distinct Quebec accent took Hydro Quebec's place at the helm. Companies such as Gastem Inc., Junex, Petrolia Inc, and Questerre Energy Corp. Raymond Savoie, former Minister of Mines in the previous Liberal government founded Gastem. Sitting on that Board of Directors are people from the former Hydro Quebec oil and gas division to the legal representative to the Royal family of Luxembourg. Junex has the famous Andre Caille, retired head of Hydro Quebec, on it's Board. International players have also become involved as partners to these smaller entities: SCDM Energy (Bouygues Group France), Pilatus Energy(Switzerland), Sprott Asset Management(Toronto), Forest Oil(USA), and Talisman Energy(Canada). Bouygues Group is a massive international conglomerate that coincidentally built the James Bay Hydro Electric dam, among others, for Hydro Quebec.
The latest trend appears to be consolidation, and quasi-take overs of massive properties and their hidden treasures. In June, 2010, Petrolia Inc bought out the interests of Junex and Gastem in the Haldimand field, Gaspe region, Quebec. Don't feel bad for them though as Junex owns 9.4% of Petrolia. One month later Petrolia entered into an agreement to develop the property on a 50/50 basis with Investcan, a subsidiary of SCDM Energie France. SCDM Energie owns 18.6% of the massive Bouygues Group - a controlling interest. Coincidentally, Investcan also has oil and gas operations in Newfoundland and Labrador - three separate on land exploration projects - one in partnership with Newfoundland's own Nalcor.
In 2008, Petrolia bought out Hydro Quebec's interests in Anticosti Island, becoming an instant partner of Corridor Resources. And so it goes. The big one came when Gastem took over the exploration rights to Old Harry on "Quebec's side". Of course it can't do anything with it, because although the Quebec government agreed to give it the rights, it does not have the legal right to action those rights - without an offshore exploration agreement with the federal government - who owns the seabed and it's bounty.
Of course all levels of government know this as do the companies, but what it does do is position them should the time come when an agreement happens. The problem for Quebec is that before the federal government will enter into an offshore agreement Quebec must first negotiate a "maritime economic boundary" with Newfoundland and Labrador. The chances of that happening under current circumstances are worse than nil. If Quebec wants a snow balls chance in hell it must first renegotiate the Upper Churchill agreement - radically altering it's terms. The government of Quebec needs to decide whether a large financial loss to Hydro Quebec's bottom line is worth tapping into the massive Old Harry field. While it may sound akin to extortion it's just business - just as the Power Contract of 1969 was.
It may be a case of 'a bird in the hand is better than two in the bush.' However, waiting too long will likely result in Quebec being too late to join in on Old Harry's fabulous wealth. After all, Corridor Resources is already doing the exploratory work off Newfoundland. It already has an offshore agreement with the federal government. It already has most of the world's largest oil companies in play at it's other offshore sites. Quebec is at least five years behind the eight ball already. Rarely has Quebec been so caught off guard when it comes to this kind of business exploitation. Perhaps, just perhaps, Quebec better get to the negotiating table and repair the damages of the Upper Churchill contract. God guard thee Newfoundland.
Things in the oil and gas industry have changed in Quebec in the last little while. Prior to 2003 Hydro Quebec was functioning in it's usual state sponsored role as controller of the resources - including oil and gas. The Parti Quebecois, Quebec's separatist political party, had placed the rights for drilling and exploration in Hydro Quebec's hands. The purpose was to know doubt develop Quebec's oil and gas industry in a monopolistic, and state controlled fashion - not unlike their role as purveyors of hydro power. However, with the election of the Liberals in 2003 that function was to change drastically.
Hydro Quebec's role in the oil and gas industry was rolled back. Small junior exploration companies, with a distinct Quebec accent took Hydro Quebec's place at the helm. Companies such as Gastem Inc., Junex, Petrolia Inc, and Questerre Energy Corp. Raymond Savoie, former Minister of Mines in the previous Liberal government founded Gastem. Sitting on that Board of Directors are people from the former Hydro Quebec oil and gas division to the legal representative to the Royal family of Luxembourg. Junex has the famous Andre Caille, retired head of Hydro Quebec, on it's Board. International players have also become involved as partners to these smaller entities: SCDM Energy (Bouygues Group France), Pilatus Energy(Switzerland), Sprott Asset Management(Toronto), Forest Oil(USA), and Talisman Energy(Canada). Bouygues Group is a massive international conglomerate that coincidentally built the James Bay Hydro Electric dam, among others, for Hydro Quebec.
The latest trend appears to be consolidation, and quasi-take overs of massive properties and their hidden treasures. In June, 2010, Petrolia Inc bought out the interests of Junex and Gastem in the Haldimand field, Gaspe region, Quebec. Don't feel bad for them though as Junex owns 9.4% of Petrolia. One month later Petrolia entered into an agreement to develop the property on a 50/50 basis with Investcan, a subsidiary of SCDM Energie France. SCDM Energie owns 18.6% of the massive Bouygues Group - a controlling interest. Coincidentally, Investcan also has oil and gas operations in Newfoundland and Labrador - three separate on land exploration projects - one in partnership with Newfoundland's own Nalcor.
In 2008, Petrolia bought out Hydro Quebec's interests in Anticosti Island, becoming an instant partner of Corridor Resources. And so it goes. The big one came when Gastem took over the exploration rights to Old Harry on "Quebec's side". Of course it can't do anything with it, because although the Quebec government agreed to give it the rights, it does not have the legal right to action those rights - without an offshore exploration agreement with the federal government - who owns the seabed and it's bounty.
Of course all levels of government know this as do the companies, but what it does do is position them should the time come when an agreement happens. The problem for Quebec is that before the federal government will enter into an offshore agreement Quebec must first negotiate a "maritime economic boundary" with Newfoundland and Labrador. The chances of that happening under current circumstances are worse than nil. If Quebec wants a snow balls chance in hell it must first renegotiate the Upper Churchill agreement - radically altering it's terms. The government of Quebec needs to decide whether a large financial loss to Hydro Quebec's bottom line is worth tapping into the massive Old Harry field. While it may sound akin to extortion it's just business - just as the Power Contract of 1969 was.
It may be a case of 'a bird in the hand is better than two in the bush.' However, waiting too long will likely result in Quebec being too late to join in on Old Harry's fabulous wealth. After all, Corridor Resources is already doing the exploratory work off Newfoundland. It already has an offshore agreement with the federal government. It already has most of the world's largest oil companies in play at it's other offshore sites. Quebec is at least five years behind the eight ball already. Rarely has Quebec been so caught off guard when it comes to this kind of business exploitation. Perhaps, just perhaps, Quebec better get to the negotiating table and repair the damages of the Upper Churchill contract. God guard thee Newfoundland.
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