France has been an oil and gas nation with oil production since the 19th century, peaking at 67,000 barrels per day in 1988. The oil regions in the mainland France are the Paris Basin, the Aquitaine Basin and Alsace (where companies like CGG and Schlumberger were founded and developed in the late 1920s, early 1930s).The country represents a stable regime with low political risk, favourable fiscal terms and extensive seismic data and well log data publicly available. Refinery capacity is available close to producing areas.
(Source: EIA (US))
The three main producers in 2014 were Vermillion, Lundin and Geopetrol. In January 2012 Total divested parts of its French oil production to Vermillion and Geopetrol, strengthening Vermillion’s position as the largest oil producer by far.
Both Geopetrol and Oelweg have producing concessions within the Seebach license area – one of MOORE’s licenses.
Opportunities following the higher oil prices
In the past many producing wells in France have been shut down due to low oil prices; often in producing fields with small production and modest remaining reserves or discoveries/oil shows indicating smaller reserves. Based on new technology available and strengthening of the oil prices, the interest for conventional oil has increased in France, both from new and existing conventional players.
This situation has opened up for reactivating past projects with limited geological risk. The Soufflenheim license was producing from 1954-68, when the Soufflenheim and Schirrhein fields were shut down due to an oil price of less than USD 2 per barrel. In 2005 MOORE (MGV) started to look at reopening these fields. However, access to attractive licenses may be limited over the next years. MOORE has been positioned right in time to secure such attractive licenses.
License application process
In France there are no licencing rounds – any oil company may apply for exploration licenses at any time. In addition to local administrations, applications for oil and gas exploration and production licenses are administrated by BEPH (Ministry of Ecology, Energy and Sea). If the applicant is considered technically and financially acceptable, the application may be considered “receivable”. This triggers a publicly announced competition period of 3-5 months for other potential applicants.
After the competition period is over the applicants normally negotiate internally for working interests and operatorships and thereafter submit joint applications (LAP). Formal awards are granted by the French Ministry of Ecology, Energy and Sea, normally 6-12 months from the end of the competition period, though since the shale oil and shale gas debate started in 2010 the process has considerably lengthened.
Exploration licenses are granted exclusively for an initial period of 3-5 years and are renewable twice with the same duration against partial relinquishment of land and with the same financial commitments, provided that financial commitments are achieved each period. The license implies an exclusive right to convert commercial discoveries into production concessions. Concessions are valid for 25 years and are renewable in periods of 25 years.
Conduct of Exploration work
Drilling an exploration well within an exploration license requires an order delivered by the head of the department where the well is planned. In addition to the technical description of the well, the application includes an environmental impact study and a public enquiry.