Uncertainty Clouds Future of Paris Basin Oil Shale

The French Minister of Ecology, wants to delay the drilling of oil shale exploration planned in the Paris Basin, because of their presumed impact on the environment.

In two interviews published Friday in Libération and La Tribune, the Minister of Ecology said she intends to delay the planned exploration wells.

"We will unite the industry and use all legal means to ensure that drilling does not begin until the environmental work as I see it, is to say beyond existing procedures, was conducted, "said Nathalie Kosciusko-Morizet.

In hes eyes, "there was an undervaluation of environmental concerns" at the time of award of exploration permits.

The statements have created a “climate of uncertainty” for companies such as Toreador Resources Corp.

“It’s penalizing and has created great uncertainty about work that has already begun,” Bruno Ageorges, head of the exploration and production arm of France’s Union Francaise des Industries Petrolieres business group, said today at a press conference in Paris.

“Some operators have asked for additional permits and now there are questions over this.”

Toreador and Vermilion Energy Inc. are among companies which have licenses in the Paris Basin to explore for shale oil.

Toreador Chief Executive Officer Craig McKenzie told analysts at a meeting in Paris in December that the company, which is partnering with Hess Corp., hired a rig and planned to start drilling a well near the Chateau Thierry permit east of the French capital as early as January.

New York-based Hess in May agreed to invest $120 million to help Toreador search 800,000 hectares (1.97 million acres) in the area.

Vermilion has said it had “encouraging” results in the area after drilling two vertical wells and fracturing rock. The Calgary-based company plans to drill two more wells this year and applied for more than 636,000 acres of permits in addition to the 175,000 already held, according to its Third Quarter report released November 5, 2010.

Charles Lamiraux, senior geologist at the French Energy Ministry, said in December the government planned to award eight permits for exploration in the Paris Basin within weeks, and another 50 were pending.

By the end of 2011, all of the permits covering the Paris Basin would be assigned to about a dozen companies, Lamiraux said.

Source: Bloomberg