Premier Pauline Marois has announced a $115 million investment into an oil extraction project on Anticosti Island that she said would bring in $45 billion over the next 30 years.
Marois said that the deal would allow the province to control half of oil extraction permits and take in the majority of the profits from the 15 to 22 oil wells to be put onto the island.
She described the project as a step towards oil independence and a much-needed measure to help balance the province's budget deficit, which she said is largely the result of the importation of oil.
The deal involves a government body named Resources Quebec, which will now own 35 percent of the shares of Petrolia making it the single largest shareholder in the oil extraction company that has permits on the island.
The oil exploration is set to begin this summer.
Last August Petrolia said that it would attempt to extract oil by fracking with propane, an unusual method which they said would reduce waste water. The plan led to objections from environmentalists, who noted that the process comes with an unknown impact on the environment.
Petrolia, Corridor Resources, Manuel & Prom - France's second-largest oil and gas company - and Junex were the other companies involved in the deal.
Marois made reference to the great future natural resource wealth in Quebec in a video to promote sovereignty last April.
The amount of oil at Anticosti is currently unknown, although some estimates have cited 45 billion barrels as a possibility. A barrel of crude oil currently sells for about $100.
A representative for Greenpeace expressed concern, and said that it was wrong to promote increased greenhouse gas emissions.
“The money should be invested to reduce our consumption,” said Greenpeace representative Patrick Bonin. “We are told that the government did not have the means to invest in transit, and then we end up with a project that will increase greenhouse gas emissions.
The Quebec Employers' Council, however, applauded the initiative.
“We need to unlock Quebec’s vast energy potential to create more wealth and generate economic, fiscal and social benefits,” said the group's president, Yves-Thomas Dorval.
The deal is expected to become official on or before March 31.
PQ was skeptical
While in opposition, the Parti Quebecois frequently criticized the Liberals for keeping its oil exploration contracts with Petrolia confidential. They expressed skepticism at the time concerning claims that billions of oil lay beneath the soil.
Petrolia president Andre Proulx agreed to release details of the deal last September.
Anticosti Island is currently home to around 300 people and is used for tourism and hunting, as hunters take aim at the 160,000 deer on the 8,000 square kilometer island which sits in the St. Lawrence River about 900 kilometers northeast of Montreal.
The island was purchased in 1895 by French industrialist Henri Meunier but his attempt to settle it failed. Consolidated Bathurst purchased the property in 1926 but shipping lumber from the island proved too costly and they sold the property to the province in 1974 for about $25 million.
