Quebec will respect Petrolia drilling contract

The Quebec government will respect a contract it signed with energy firmPetroliafor exploratory oil and gas drilling onAnticostiIsland, the company's president said Wednesday after meeting with the premier.

• Petrolia CEO says he wants Quebec premier to clarify stance on energy drilling
• Philippe Couillard says he's ready to pull plug on Anticosti oil, gas exploration

AlexandreGagnonhad been calling for a meeting with PhilippeCouillardsince the lattersignalleda few weeks ago he wanted to back out of the deal.

"The project is going ahead and (the government) will respect the contract,"Gagnontold reporters following the meeting.

Couillard relents

Couillard'soffice issued a statement confirming it would respect the deal as long as it met environmental standards.

The previousPartiQuebecois government signed a contract to become a financial partner in a joint venture withPetroliato explore a hydrocarbon deposit on the island in the Gulf of St. Lawrence.

Couillardhad said in recent weeks the decision was a "serious mistake" as drilling could affect the island's ecosystem.

He said the exploratory well-drilling includes fracking, a controversial practice where a mixture is pumped deep underground in order to crack rocks and release natural gas, which risks affecting the water table.

GagnonsaidCouillardreassured him during their meeting that the exploratory drilling will go ahead this summer as planned if the province's Environment Department grantsPetrolia(TSX-V:PEA) the permits.

Couillardtold reporters before the meeting that he had doubts about whether drilling on the island was worth it, referring to a recent news report indicating the presumed deposits couldnot be profitable.

The premier had previously said he would "do everything" to prevent hydraulic fracturing on the island, adding that the bureaucrats reviewing Petrolia's application for drilling permits "will do what we tell them to do."

Easing doubts

Gagnonsaid following Wednesday's meeting in Quebec City he understoodCouillardstill had doubts, but the point of the project is to determine whether or not the presumed deposits are there, and if the project can be profitable.

"For now, (Couillard) has doubts and it's up to us to do the work and show the opposite,"Gagnonsaid. "But he wants to do the (exploratory work) and to respect the contracts and for us that's great news."

Couillard'soffice also said the province was also interested in Petrolia's projects in the Gasppeninsula.