France to Phase Out Oil & Gas Export Guarantees

France plans to stop providing state export guarantees to upstream projects involving the dirtiest forms of oil next year, following by all oil from 2025 and natural gas from 2035, its finance ministry said on October 12.

The forms of oil that will be barred from securing guarantees in 2021 include heavy oil, shale oil and bitumen oil sands, the ministry wrote in a proposal to parliament published on its website. France already ended guarantees for projects involving hydraulic fracturing and flaring this year, and previously withdrew support for coal.

The ministry justified continuing guarantees for gas projects until 2035, as gas can enable some countries using dirtier fuels such as coal to reduce their emissions. French energy giant Total is investing in a number of major new gas projects internationally, including Arctic LNG-2 in Russia, Mozambique LNG and a seventh train at Nigeria LNG.

The guarantees reduce the risk for French companies and commercial banks by guaranteeing payments and financing in export transactions. According to the ministry, the government has provided guarantees totalling €4.5bn ($5.3bn) to the oil and gas industry over the last decade, 60% of which is still outstanding.