 Technology from Europe:
France/Belgium
French influence extends far beyond home, says upstream chief
Didier Houssin is director for Energy and Mineral Resources at the Ministry of Finance, Economy and Industry in Paris. His directorate's responsibilities include the supply of hydrocarbons, the nuclear energy industry, refining and oil logistics, mines and raw materials, and regulation of the national network of pipelines. The administration for supply of hydrocarbons includes upstream and downstream operations, as well as procurement of imported supplies from international sources.
Question: Mr. Houssin, what is your organization's “mission” on behalf of France's upstream industry?
Answer: We promote E&P activity within French territory. We are also in charge of acreage awards and the dissemination of data related to French E&P activities.
Q: How good was last year for the French E&P market, and what is your assessment of prospects for 2004?
A: During 2003, exploration work resumed with the drilling of three wells. One was offshore (Iroise Sea); the other two were located in the Paris Basin.
As concerns the offshore Polkerris 1 well, it was dry. This well was drilled by CNR International off Brittany, and it was the first well drilled offshore the French Metropole since 1996.
One of the two wells in the Paris basin, drilled by Vermilion, proved the existence of an oil accumulation in the upper Keuper formation. Production tests will be carried out on this well during 2004. The Paris basin is a mature, but still attractive, area. This year, six deep wells and five shallow wells are planned. Exploration in the Aquitaine basin is also expected to resume, with two deep wells planned during 2004.
Many infill wells were delayed during 2003, as some operators chose to carry out optimization work. They continue rehabilitation operations on old wells, so as to slow the decline of some fields' output. But at the end of 2003, interesting prospects concerning future development work were emerging.
This happened after two wells were successfully drilled – one in the Aquitaine basin by Esso Rep (Les Pins field), and one by Vermilion in the Paris basin (development of the eastern portion of Champotran field). In the vicinity of the latter field, one can also expect delineation wells to be drilled, following the above-mentioned discovery. And in the Paris basin, after having drilled its first test well, Lundin Petroleum is beginning to use horizontal drilling to develop a small field that was discovered in the 1980s.
Q: How do you react to people in the industry, who say that France is no longer viable as, or has potential for, an exploration province or even a strong production province?
A: Even if oil and gas production in France covers only a tiny part of our domestic demand, it is an important, profitable business. About 10 independent companies operate in our two main basins. Their business would remain profitable, even with lower oil prices. The fact that new applications for exploration permits are regularly filed shows that the oil and gas potential of French sedimentary basins, both onshore and offshore, is still generating some interest.
Several French areas may be considered as under-explored. Other French areas are mature, but the exploration phase is far from being over, especially in regions like the Paris basin. There, progress has been made in recent years in the definition of new prospects.
Q: What role does your office play in E&P tax policies and greater access to exploration tracts?
A: I believe E&P taxation in France is fair and attractive. I don't think it is an issue nowadays. However, my office is more directly involved in granting permits or concessions. There are no (licensing) rounds in France, and it is possible to apply at any time for an exploration permit, for any zone that is free of existing oil or gas permits.
Because the prerequisite for making an application is to get the right data, we are improving the process of data access. To promote exploration in French sedimentary basins, and help companies assess their oil and gas potential, our department also participates in publishing non-exclusive regional studies carried out by the Institut Français du Pétrole (IFP). The next one, which is in progress, will be devoted to the southern part of Aquitaine basin, which is presently not covered by any exploration permit.
Q: How is the government trying to help French companies expand business worldwide?
A: We support our companies' development, both in France and abroad. Nevertheless, we want French territory to remain one of the places where technology is created, and we are working to create the best environment for innovative business in France.
Q: What are some major exploration or field projects that French companies are involved in?
A: French companies have been involved in major projects worldwide for a long time. Among these projects, I would mention, as examples, the high-pressure/ high-temperature (HP/HT) Elgin/ Franklin field offshore the UK, the Sincor heavy oil development project in Venezuela and the Girassol deepwater development project offshore Angola. French companies have contributed greatly to these projects, which are a good example of French-created upstream technology and support capabilities.
Q: French companies have contributed greatly over the years to technological innovation. Can you give a progress report on new upstream technologies?
A: In spite of our modest, domestic E&P activity levels, which I have already mentioned, I would like to emphasize that French oil and gas companies, and contractors, have always been at the forefront of the hydrocarbon industry.
Actually, thanks to their success, many so-called French companies are, today, international groups with more than half of their employees outside France. We are pleased by this evolution and believe it is profitable for all parties.
IEA (International Energy Agency) has anticipated that oil and gas demand will increase nearly 60% by the end of the next decade. To supply the market, it will be necessary to renew and diversify oil and gas reserves. New technology is, more than ever, a must. Oil and gas companies, and contractors and suppliers that operate in France, can take advantage of highly skilled manpower. They also have access to cutting-edge research coming from independent R&D centers, such as IFP (Institut Français du Pétrole) or IFREMER (Institut Français de Recherche pour l'Exploitation de la Mer).
Last year, we worked with managers and experts from the oil and gas industry to identify research priorities for the future. Among those priorities, resolving conflicts between hydrocarbon utilization and sustainable development is a major challenge. We do believe that our industry and research centers can help the world meet this challenge. One example is the development of technologies and know-how concerning carbon capture and sequestration.
Q: Which international areas are attracting greater oil & gas company interest and investment money?
A: Obviously, areas like the Former Soviet Union or the Middle East have considerable potential. The questions at stake are the evolution of the gradual opening process that we are witnessing now, and the conditions that will be offered to investors. Companies are also moving toward new frontiers, such as ultra-deep offshore tracts or heavy oils. Overall, I believe there is a growing concern about reserves replacement, which could be a driver for companies to look again at some areas that they may have under-investigated – such as France!
Reserves replacement is an issue that governments of consuming countries have to consider in the perspective of long-term security of supply. The date of the future “oil peak” is still an unanswered question. But I think it is not too early to pay attention to warning signals, to investigate alternatives and to prepare plans to ensure a smooth transition toward a less oil-intensive economy. 
Didier Houssin graduated from Ecole Nationale d'Administration in 1983. He then began his career as an advisor for international affairs in the Ministry of Industry. From 1987 to 1990, he served as an advisor for European affairs in Total C.F.P. Mr. Houssin rejoined the French Ministry of Industry in 1990. After four years in the General Directorate of Administration and Finance, he was appointed director of hydrocarbons in 1994. In 1998, he became director of Raw Materials and Hydrocarbons. He is now director of Energy and Mineral Resources within the Ministry of Economy, Finance and Industry.
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