Washington (Platts)--23Nov2012/1250 pm EST/1750 GMT
Independent producer Lone Pine Resources said it intends to file a claim under the North American Free Trade Agreement challenging the Quebec government's "expropriation without compensation" of its oil and gas development rights in the Saint Lawrence Valley. The company, incorporated in Delaware and based in Calgary, filed the notice with the Canadian government earlier this month. Lone Pine in a statement said it holds "numerous exploration permits in the Saint Lawrence Valley issued by the Quebec Ministry of Natural Resources and Wildlife." But Quebec lawmakers in June approved legislation (Bill l8) that imposed a moratorium on hydraulic fracturing while further study is conducted on its potential environmental impact. The company said that the measure suspended "all oil and gas exploration activities beneath the Saint Lawrence River upstream of the Anticosti Islands and on the islands situated in that part of the river, and revoked all previously issued mining rights under that stretch of the Saint Lawrence River, including an area covered by a permit previously held by Lone Pine." The expropriated permit covered 33,460 net acres, and Lone Pine continues to hold exploration permits covering 398,850 gross (240,320 net) acres in Quebec, it said. The company also said it has "played an important role in exploration with a view to eventual development of Quebec's significant shale gas resources, having invested millions of dollars and considerable time and resources in Quebec since 2006." In addition, it said it was an active participant in the government environmental hearing process that was "pre-empted" by Bill 18. "Lone Pine has and will continue to attempt to engage the Government of Quebec in a constructive dialogue and to find a mutually agreeable solution on these issues. Lone Pine has filed this notice as part of the dispute resolution mechanism available under NAFTA and intends to submit the claim to arbitration at the appropriate time pursuant to the relevant NAFTA provisions, should the matter not be resolved by that date," the company said.--Jeff Barber, jeff_barber@platts.com--Edited by Valarie Jackson, valarie_jackson@platts.com