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France denies Hess Energy exploration permits in Paris basin

BY TARA PATEL

NEW YORK (Bloomberg) -- France blocked the transfer to Hess Corporation of seven exploration permits in the Paris Basin on the grounds that the oil company remains interested in shale-energy development despite a ban.

Hess “has not abandoned its original project,” French Environment Minister Philippe Martin said in a statement, referring to past plans for the permits that involved hydraulic fracturing for shale oil.

The decision is the latest in a longstanding dispute with oil companies over the country’s ban on the drilling technique widely used in the United States to extract oil and natural gas from shale rock. France outlawed fracking in 2011 in the face of claims by companies including Total and Toreador Resources Corporation, later merged with ZaZa Energy France, that the country may have substantial reserves.

Hess in France is an “empty shell” that lacks technical competencies required by the mining code, Martin said.

Hess and Toreador announced plans in May 2010 to spend as much as $120 million searching for oil in the Paris basin, whose geology may be similar to that of North America’s sprawling Bakken Shale deposit. They planned to use fracking to explore for shale oil over as much as 420,000 hectares, mostly to the south and east of the French capital.

‘Incontestably’ Fracking

After parliament banned fracking, Toreador sold conventional oil-producing assets to Vermilion Energy and said others had been transferred to Hess. The transfer had to be approved by the government.

The original plan for one of the permits called Chateau Thierry was “incontestably and exclusively” to explore for shale oil and gas, Martin said.  “Effective” exploration of the permit can’t be done without fracking.

France’s constitutional court upheld a ban on fracking last month, ruling that the law is a valid means of protecting the environment.

The ban remains controversial with a parliamentary report published urging the government to allow limited fracking to evaluate potential reserves.

Martin said he backs less use of fossil fuels and nuclear energy and more renewables and energy efficiency.

11/29/2013

 

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