It has been revealed that there is increasing optimism for the future production rates of gas and oil in Quebec. As market uncertainty and regulatory pressure weigh heavy in Alberta, energy organisations such as Questerre Energy Corp are turning their sights to other prospects. Michael Binnion, the chief executive of Questerre, said: “Who would have thought that I’d go to Quebec to avoid my problems? But that’s where I’m at.”
It was at Montreal’s annual Questerre Energy conference that Mr Binnion, among others, revealed that oil and gas developments are diverging for Alberta and Quebec. While the former, under the latest NDP government, remains plagued with uncertainty over taxes and royalties, Quebec is actively discussing ways to increase domestic oil and gas production.
“It’s just human nature: We’re happy when things are getting better and we’re unhappy when things are getting worse,” Mr Binnion explained when talking about the oil and gas industry's view on Alberta and Quebec. “But let’s be clear: we’re still going to drill 8,000 wells in Alberta this year and there is a real industry there. We may not even drill one well in Quebec.”
The Quebec government’s plans for oil and gas regulation have helped fuel the growing optimism. Premier Philippe Couillard’s liberal leadership has laid out a clear regulatory road map for the industry, diverting from the confused and often improvised actions taken in the past. Earlier in November the province completed a series of environmental oil and gas studies, the findings of which will be used for public consultations. These will come prior to changes to energy laws and policies expected in 2016.
Myron Tetreault, lead director for PHX Energy Services Corp in Calgary and executive chairman of Quebec’s Petrolia Inc, is in a unique position in that he straddles the energy industry in both provinces. Mr Tetreault explained that one problem in Alberta is that there is still no word on when commodity prices might turn around, which is increasing local pessimism; meanwhile, with strong technical results of preliminary drilling and soil sampling in Quebec, there is hope that commercial production could soon be a real possibility.
“There is an interesting contrast right now between Alberta and Quebec,” Mr Tetreault explained. “It’s not that the Quebec industry is not affected by commodity prices. They are. But they’re at the exploration stage. And so it doesn’t have that immediate impact on cash flows like it does for producers in Western Canada. And because of the structural changes in the industry, drilling costs are actually down.” As a result, optimism for Quebec’s domestic energy production grows.
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