Western Europe: France

WESTERN EUROPE

France

Licensing. In 1999, there was a 24% increase in the surface area covered by exploration permits, mainly due to the granting of a 4,190-sq-mi permit in the Brittany offshore. The concession was granted during the second half of the year to Ranger Oil and Amerada Hess. Including this award, the offshore permit surface area has now reached 13,735 sq mi, and is approaching the level established at the beginning of the 1980s. Onshore, most awards involve the Paris basin, where three permits were granted, which together represent over 1,230 sq mi. However, the onshore permit surface area has not changed much, because several permits have expired or were abandoned.

Overall, there were 38 valid exploration permits on December 31, 1999, compared to 46 permits at year-end 1998. Production permits totaled 76 on December 31, 1999, against 75 the year before.

Exploration. Oil companies operating in France were hit hard by low crude prices during much of 1999 ($10 to $16 per bbl for Brent during the first half of the year). Therefore, the downward trend in exploration activity during the last ten years was exacerbated by these low prices. In 1999, seismic exploration activity and exploration drilling reached their lowest levels since the beginning of systematic exploration in the French oil basins. There were only 0.3 team-months of seismic exploration and no exploration wells were drilled. A seismic survey carried out by Gulf Canada on the St. Pierre et Miquelon permit nonetheless demonstrates renewed corporate interest in offshore areas, which had been evident for several years.

Exploration investment declined 71% last year (52 million francs, compared to 1998’s 182 million francs), a rate significantly sharper than the decrease in production investments.

Production/development. In 1999, French production of oil and gas continued its decline (10% and 7.8%, respectively, compared to 1998). With 35,000 bpd of oil and condensate and 290 MMcfd of marketed gas, this production now represents only 2% of France’s oil consumption and 6% of its gas consumption.

The Paris basin supplies 53.6% of all oil production, while the Aquitaine basin contributes 45.9%. The latter produces virtually all the gas (93%). Four companies produce almost 90% of the oil (Esso Rep, 32.7%; Elf AEPF, 28.6%; Vermillion Rep, 16.9%; and Coparex, 11.4%). Elf AEPF produces virtually all the natural gas.

Low crude prices caused companies to postpone some field work, which explains the accelerated production drop (10% between 1998 and 1999 vs. 4% between 1997 and 1998). Investments fell 16% last year (366 million francs for 1999’s projected closing, compared to 437 million francs for 1998).

Most spending was focused on the Aquitaine basin, where three appraisal / development wells were drilled, compared to only one in the Paris basin. In Aquitaine, the highlight of the first half was the completion of a new well by Esso Rep in Courbey field, which doubled its production. In the Paris basin, the only well drilled (located in Villeperdue field) was a horizontal injector, which constitutes a first in France.