Daily Management Review

France to stop oil exploration in 2018


09/07/2017


France will stop issuing new permits for exploration of hydrocarbon deposits next year, as the country seeks to complete all oil and gas production by 2040, according to a bill submitted on Wednesday, Bloomberg writes.



marianne muegenburg via flickr
marianne muegenburg via flickr
Such a step would allow the government to abandon already more than 40 requests for exploration licenses, although some existing permits may be extended to comply with contracts.

This includes the Guyane Maritime license from French Guiana, in which the French energy company Total SA has a stake, said adviser to the Minister of the Environment Nicolas Hulot to journalists in Paris.

This bill "would allow us to gradually free ourselves," Hulot said after the Cabinet meeting, also confirming that current permits for exploration in French Guiana will remain valid: "This will allow investors to make significant progress in their renewable investments." At present, oil and gas make us dependent on geopolitics. "

The proposed bill is part of President Emmanuel Macron's broader leadership plan to fight climate change after his US counterpart Donald Trump stepped out of the landmark Paris agreement to combat global warming.

Although the volume of oil and gas production in France is small, this plan may affect companies such as Vermilion Energy Inc., which has several concessions and could reduce the prospect of discovering new fields outside of French Guiana.

According to the presentation in 2015, France produced 6 million barrels of oil, which is only 1% of demand in the country. The annual income from exploration and production of oil and gas in France is estimated at 300 million euros ($ 358 million), and the industry created about 5 thousand jobs. Existing production licenses will not be renewed after 2040 in accordance with the proposed bill.

"We do not expect that this new legislation, if adopted, will have a significant impact on Vermilion, as our operations focus on activities such as well workover, well drilling and waterflood optimization," the company said in a statement from the Canadian Calgary.

source: bloomberg.com






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