France Cancels Shale Gas Exploration Permits on Non-Fracturing Commitment

PARIS (Dow Jones Newswires), Oct. 3, 2011

The French government has cancelled three exclusive shale gas exploration permits as the holders didn't commit not to use a hydraulic fracturing process, energy minister Eric Besson and environmental minister Nathalie Kosciusko-Morizet said Monday in a joint statement.

The three permits--Nant and Villeneuve-de-Berg, held by U.S.-based Schuepbach Energy LLC, and Montelimar, held by Total--represent all of France's identified potential shale gas fields.

The French government banned hydraulic fracturing in May this year due to concerns about the technique's impact on the environment.

Shale oil deposits are pockets of oil trapped in pores of sedimentary rock called shale. Miners use a process known as hydraulic fracturing--or fracking--in which water, sand and chemicals are pumped into the ground to crack open the rock and force the oil back to the surface.

A report issued in April following a government request said French shale oil and gas fields are potentially some of the most promising in Europe and banning exploration before the reserves are assessed could be detrimental to France's economy and labor market.

French shale resources remain "largely" unknown due to a lack of exploration, and the potential commercial viability of the fields is also unknown because of a lack of tests, the report said.

Moreover, "the interest major oil and gas operators and North American companies which are specialized in extracting shale hydrocarbons, as well as the investments they plan to make, show the scale of the potential," said the authors of the report, most of whom are mining engineers working for state agencies.

No one at Total nor Schuepbach was immediately available to comment.

Copyright (c) 2011 Dow Jones & Company, Inc.


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