Toreador Awaits Clarification as Fracking Ban Discussed
Toreador Resources Corporation today its announced first quarter 2011 financial results, as French parliamentarians discussed legislation that would have a significant impact on the future of the company.
The National Assembly is presently debating a bill that would ban the hydraulic fracturing techniques used in the extraction of shale gas and shale oil. The original bill proposed also called for the revocation of licences already granted to companies including Toreador in the Paris Basin and in southern France in an area between Montelimar, Nimes and Millau..
In written remarks, Mr. Craig McKenzie, President and CEO of Toreador commented: "As the oil industry in France looks to adapt to modern resource development and technological change, the French legislature is considering a number of new bills of law to provide additional oversight to the industry. Toreador continues to actively work for stakeholder alignment and gas developments unfold, we will update shareholders."
In a conference call, McKenzie said that the company was awaiting for direction from the legislative process before proceeding further.
He would not comment on possibility of legal action against the French Government to pursue compensation.
Speaking on French radio, French Environment Minister Nathalie Kosciusko-Morizet said government will back a proposed ban on hydraulic fracturing because of threats to the environment.
“I’m against hydraulic fracturing. We have seen the results in the U.S.,” Nathalie Kosciusko-Morizet said today on RMC radio. “There are risks for the water tables and these are risks we don’t want to take.”
Toreador, in partnership with Hess Oil France, had planned to drill the first of three wells at the Chateau Thierry permit outside Paris to explore for shale oil, while Vermilion Energy Inc. was planning to fracture shale in three existing wells after exploration last year. Low levels of oil production have been ongoing for decades in the Paris region.
In an article in the New York Times, Mark R. Katrosh, the chief executive of Hess Oil France cited estimates that France held as many as 100 billion barrels of shale oil, of which perhaps 10 billion were recoverable.
Regarding the potential size of the resource, Mr. Katrosh said, “we’re all talking hypothetically right now. The country needs to debate and decide whether they see value in understanding what the potential resource is, and if they do, we’re one of the companies that’s willing to make the investment to better understand this and demonstrate that we can operate safely and respectfully of the environment.”
Members of the National Assembly will vote on a final version of the bill on Wednesday before it moves to the Senate for approval.
Related Reading: France: Environmentalists Fear Slippage