Northern Cross Limited has filed a lawsuit against the Yukon government, saying a moratorium on hydraulic fracturing (fracking) in the territory has made its claims in the Eagle Plains area essentially useless.
The suit, filed this week in Yukon Supreme Court, claims damages worth $395 million for money already spent on the company's claims.
It also claims damages "for loss of opportunity" worth $1.83 billion — "being the fair market value of the 8.6 billion barrels of unconventional resources proven to exist on the Subject Lands," according to the Statement of Claim.
The suit names the government, the department of energy, mines and resources, and the department's minister as defendants.
According to Northern Cross, the territory's Oil and Gas Act allows the government to cancel a company's permits, but it must provide compensation. Northern Cross says the fracking moratorium amounts to a de facto cancellation, or "expropriation of Northern Cross' interests."
The Yukon-registered company owns 15 exploration permits in the Eagle Plains area of northern Yukon, comprising more than half a million hectares of oil and gas mineral rights.
No warning of moratorium, company says
According to the Statement of Claim, the company spent millions on exploration work and permits and was given no prior indication that the government was planning to impose a moratorium on fracking.
"These Permits were obtained with the Defendants' full knowledge and understanding that Northern Cross expected the subject lands to contain unconventional resources, which would require hydraulic fracturing to extract," the claim reads.
It goes on to explain that the company secured $115 million in investment in 2011 and met with Yukon government officials to explain its plan.
"At no time during these discussions did the Defendants indicate that hydraulic fracturing might not be permitted," the claim says.
'The cost ... should be borne by the public'
The former Yukon Party government announced its policy on hydraulic fracturing, in 2015. It would only allow fracking in the southeast corner of the territory — far from Eagle Plains.
The Liberal government was elected a year later, on a promise to impose a territory-wide moratorium.
"The cost of the Moratorium should be borne by the public, rather than by Northern Cross, who has spent over $100,000,000.00 in capital expenditures in good faith to develop its oil and gas resources in the Yukon," the claim says.
None of the company's claims have been proven in court. The Yukon government has not yet filed a statement of defence.
Nobody from Northern Cross was available for comment.