Pebercan Inc. - s. 3.2 of NI 51-101

Headnote

Exemption from National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities - Exemption granted from s. 3.2 to the extent that it requires qualified reserves evaluator to be a member of a professional organization -- reserves evaluator a member of the Portuguese Society of Engineers.

Rules Cited

National Instrument 51-101 -- Standards of Disclosure for Oil and Gas Activities.

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, CHAPTER S.5, AS AMENDED

AND

IN THE MATTER OF

NATIONAL INSTRUMENT 51-101

STANDARDS OF DISCLOSURE FOR OIL

AND GAS ACTIVITIES ("NI 51-101")

AND

IN THE MATTER OF

PEBERCAN INC.

EXEMPTION

(Part 8.1 NI 51-101)

WHEREAS the Director of the Ontario Securities Commission (the "Director") has received an application (the "Application") under Part 8.1 of NI 51-101 from Pebercan Inc. ("Pebercan") for an exemption from section 3.2 of NI 51-101 to the extent that it requires the qualified reserves evaluator appointed by Pebercan to be a member of a professional organization as defined in NI 51-101;

AND WHEREAS the Director has considered the Application and staff's recommendation;

AND WHEREAS Pebercan has represented to the Director that:

1. Pebercan is a reporting issuer in Quebec and Ontario. Its head office is located at 507 Place d'Armes, Suite 1900, Montreal, Quebec. Pebercan, through its wholly-owned subsidiary Peberco Limited, holds exclusive oil and gas exploration and development rights on five onshore permits located in the Republic of Cuba. Pebercan does not currently possess any other oil and gas interests.

2. NI-51-101 is not yet in force in Quebec. Consequently, Pebercan is seeking an exemption in Ontario only.

3. Pebercan intends to appoint Mr. Victor Alcobia ("Mr. Alcobia") as its reserves evaluator. Mr. Alcobia is a senior reservoir engineer at BEICIP-FRANLAB, a firm of Petroleum Consultants based in France. BEICIP-FRANLAB is the consulting branch of the French Institute of Petroleum.

4. Mr. Alcobia is independent of Pebercan, as defined in NI 51-101.

5. For the fiscal year ended December 31, 2002, Pebercan retained Mr. Alcobia as its reserves evaluator.

6. Mr. Alcobia was retained for several reasons including his specific knowledge and experience of Cuban petroleum geology gained through his work at BECIP-FRANLAB.

7. BEICIP-FRANLAB has been involved for more than 15 years in Cuban petroleum geology in several fields of research such as field and petroleum geology, reservoir engineering, and technical training.

8. Pebercan intends to appoint Mr. Alcobia as its reserves evaluator for the fiscal year ended December 31, 2003. The appointment of Mr. Alcobia would ensure continuity and avoid additional costs related to the appointment of a new qualified reserves evaluator, as defined in NI 51-101, who is not familiar with Pebercan's properties and Cuban geology.

9. Mr Alcobia is not a member of a professional organization, as defined in NI 51-101, because there are no such professional organizations in Europe.

10. Mr. Alcobia is a member in good standing of the Portuguese Society of Engineers ("PSE"). PSE meets items i), ii) and iii) of the definition of professional organization under NI 51-101, but not item iv).

11. Mr. Alcobia possesses the necessary qualifications and experience outlined in the Canadian Oil and Gas Evaluation (COGE) Handbook, Volume 1, prepared by the Society of Petroleum Evaluation Engineers and the Canadian Institute of Mining, Metallurgy & Petroleum.

12. Mr. Alcobia, as a reservoir engineer, has been conducting reserves evaluations for more than 20 years.

13. Mr. Alcobia's qualifications, as a senior reservoir engineer, are supported and confirmed by three qualified and experienced sponsors who attest to his experience and qualifications.

14. Mr. Alcobia is familiar with the requirements of NI 51-101 and will conduct Pebercan's reserves evaluation in accordance with the COGE Handbook.

AND WHEREAS the Director is satisfied that to do so would not be prejudicial to the public interest;

THE DIRECTOR HAS DECIDED THAT Pebercan is exempt from part 3.2 of NI 51-101 to the extent that it requires the qualified reserves evaluator appointed by Pebercan to be a member of a professional organization as defined in NI 51-101 for so long as:

1. Pebercan appoints Mr. Alcobia as its reserves evaluator and complies with the other provisions of NI 51-101 that refer to a qualified reserves evaluator by using Mr. Alcobia;

2. Mr. Alcobia remains a member in good standing of the PSE; and

3. the Director does not advise Pebercan in writing that Pebercan's reserves reporting, or the underlying evaluation report upon which Pebercan's disclosure is based, is not materially compliant with the COGE Handbook.

March 3, 2004.

"Iva Vranic"