Bevington looks to change laws on oil and gas lease transfers

Bevington looks to change laws on oil and gas lease transfers
MP Dennis Bevington questions sale of Beaufort Leases to Franklin Petroleum in House of Commons in September 2012. Photo: CPAC.

Western Arctic MP Dennis Bevington introduced a bill into the House of Commons last week amending legislation on the transfer of oil and gas leases to give the minister - and the public - more decision-making powers.

The bill, which received first reading last week, amends section 85 of the Canada Petroleum Resources Act to force all lease transfers to be approved by the Natural Resources minister.

The bill also proposed a 60-day period of public comment before the minister makes his or her decision – all of which can be made through the department’s website – and requires that the minister make his or her decision public through notification in a local newspaper.

Last September, six parcels totalling nearly a million hectares in the Beaufort Sea were sold for $7.5 million to Franklin Petroleum Ltd., a tiny British company with a net corporate worth of minus $32,000.

At the time, Bevington fumed that the deal was a “fire sale” of Canadian resources with no control over who leases could be transferred to.

Franklin CEO Paul Barrett indicated last October that the company was in contact with Korea and Russia to potentially partner on the leases. Current legislation would not allow the minister to refuse a transfer.

“There is no way for Canada to control who gets these valuable leases,” Bevington said. “Canadians were rightly concerned about the purchase of Nexen by the Chinese state-owned corporation CNOOC. With the great interest in Arctic resources now gripping the world, Canadians need more certainty and accountability in our development as it moves forward.”

Though Bevington was upset by the leases being awarded to a tiny company for a miniscule amount of money – previous auctions sold parcels in the half-billion dollar range – and the fact that companies can win bids solely with a letter of credit, his proposed bill does not seek to amend those items.

The bill will be debated during second reading at a later date, yet to be announced.

Leave a Comment

You must be logged in to post a comment.

Social Networks