PRESS RELEASE – OILGEN – 28 SEP 2017
OILGEN CEO AUDITIONED BY FRENCH PARLIAMENT ON OIL AND GAS EXPLORATION BAN
Oilgen, the Aberdeen-based firm specialised in geosciences, reserves evaluations and energy advisory services, announces it has taken practical actions to defend the French Oil and Gas sector against a new law Project, aiming at a full ban of hydrocarbon exploration in France and an end of all production by 2040.
CEO Laurent Schirrer was auditioned on 20 September by Mr Jean-Charles Colas-Roy, a French MP and the rapporteur of law Project number 155 within the Sustainable Development Commission of the French Assemblée Nationale. Two other Members of the French Parliament were represented.
The new law Project was drafted by the French Minister of Ecological and Solidarity Transition Nicolas Hulot to position France as a leading country in the fight against greenhouse gas emissions and climate change.
Some legal aspects of the first draft proposal, which included a ban on production concessions renewal, were criticised by French Conseil d’Etat on 6 September, as was the accompanying impact study in which “severe flaws” were identified. A revised draft was passed-on to the French Parliament for examination. 131 amendments were proposed. After consultation of key stakeholders and professional bodies like Oilgen, the Sustainable Development Commission approved the bill on 26 September. The general examination of the law Project by the Assemblée Nationale will take place at start of October and the law is very likely to be passed by end of the month.
Oilgen believes the law will be counter effective in terms of global emissions, as it will result in France importing hydrocarbons produced with greater impact on the environment.
The law is presented as a “symbolic example” to other nations to follow suit, but this is unlikely to happen. France oil production represents only 850,000 t a year, which undermines the credibility of this measure.
The law threatens 1,500 direct employment and the economic activity linked to exploration drilling.
France’s territory has huge prospective conventional gas resources in at least three basins, including a promising play offshore Mozambique. Substitution of coal power generation by gas is seen as a key component of carbon mitigation policies. A gas discovery could mean billions of euros positive impact on France’s commercial balance. Unfortunately, conventional gas and oil are treated equally in the law Project.
Oilgen is favourable to carbon mitigation policies that reduce the demand for non-substitutable fossil fuels or that encourage energy efficiency. The services we provide participate to producing oil and gas with lowest operating cost hence lowest impact on the environment. Oilgen defends that the Oil and Gas sector plays an active and collaborative role in the Energy Transition, through transfers of technology – Carbon Capture and Storage is a good example of such promising application.
Laurent Schirrer said: “I explained to French MPs that the six small to medium size producing companies left in France will pay a dear price for this symbolic measure. France has 9.5% unemployment rate and cannot afford to destroy its economy anymore or miss opportunities. In addition, the French government is hinting at a royalty tax increase of EUR6 per barrel, as a way to finance the losses incurred by the new law ! That is unacceptable. It would be the nail in the coffin for small French producers. Two internal reports by the French government in 2015 and 2016 recommended keeping exploration alive to create synergies with the CCS and geothermal sectors. Our biggest hope is that some French Deputés are receptive to pragmatic arguments like the one I developed during my audition. But this is unlikely. It is sad because many of us promote a realistic approach to the Energy Transition issue, working together to reduce carbon emissions. One must make the hydrocarbon sector an ally not a scapegoat.”
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