Pétrolia Inc. and state-owned Hydro-Québec have disclosed the terms of an agreement over exploration rights on the island of Anticosti that had been under wraps for more than five years.
The refusal to divulge the details provoked an outcry from critics who said the "secret" deal was essentially a giveaway to junior exploration company Petrolia.
Petrolia estimates there are more than 30 billion barrels of oil underneath the remote island in the Gulf of St. Lawrence, which has less than 300 residents but thousands of free-roaming deer.
The company, as well as other firms, have been at the centre of a public controversy over the development of a homegrown oil and gas industry and the resulting environmental, economic and safety issues.
The key terms of the agreement released Thursday include:
Hydro-Quebec's assigning of all its rights and obligations in 35 permits to explore for oil on Anticosti.
Petrolia granting to Hydro-Quebec a so-called priority fee on possible oil production; the fee is equal to one per cent on the first three million barrels of oil produced, two per cent on the portion between three million and 10 million barrels, and three per cent on the portion exceeding 10 million barrels.
A right of first refusal for Hydro-Quebec to participate in the development of a commercial hydrocarbon discovery up to 50 per cent of any interest offered to a third party.
Energy giant Hydro-Quebec decided to sell its exploration rights on Anticosti after conducting what it says was inconclusive exploration work between 2003 and 2005.