Game over for France’s E&P!

France’s upstream oil and gas industry is officially shut down for ever. ‘Environment’ has replaced ‘Industry’ as former TV star Nicolas Hulot plays the role of Louis XIV’s finance minister Jean-Baptiste Colbert. Ex-Paris Basin explorer Neil McNaughton takes a stroll down memory lane and regrets the passing of a cottage industry.

In the 1980s, I got head hunted from my then major employer and went to work for a small, adventurous American independent that had set it sights on the Paris Basin. The area’s potential had been spotted by some savvy consultants who had translated and tarted-up the vast amounts of publicly-available literature on France’s geology. The company noted that a) the number of wells drilled per acre was a fraction of those drilled in Texas and b) there was a small but promising oil boom in the 1970s that had proved production and c) the oil price was back on the rise. But what clinched the deal was the opportunity for great food and wine and traveling around some nice countryside saying ‘Parlay-voo?

My responsibility at the time was organizing seismic surveys. This was extremely easy* since all ‘industrial’ activity was regulated and policed centrally. Louis XIV’s finance minister Colbert was partly responsible for this and, 300 years on, ‘Colbertism’ was still going strong. A central authority had the responsibility for issuing exploration and production permits. Regional authorities supervised operations and (best of all for us explorers) just about every action, from surveying a seismic line to drilling a well was codified such that negotiations with landowners were straightforward. Compensation was determined according to a scale (depth of ruts, width of crop damage) that had been negotiated between the state and the farmers’ unions. These regulations were not unique to oil and gas. I remember one farmer sighing as he saw us coming. He had seen first a freeway and then the TGV come through his land. We were a relatively minor nuisance.

Mining (and oil and gas) rights were held, not by the landowner, but by the state. There was no payments to be negotiated in respect of future production although a small royalty was paid to local communes, which seemed to keep them happy. It was a goldilocks environment for operators. The Paris Basin, by the way, was a well established oil province even in the 1980s. One field, Shell’s Saint Martin de Bossenay was a proving ground for low cost operations and for environmental protection. An aging operator-owned workover rig trundled around cleaning up the wells. Local labor was used and a large fish tank filled with surface water from downstream of the production facility was visible proof of clean operations.

After a year or two, our efforts (and those of other operators) proved that there was indeed life left in the Paris Basin. With the oil price riding high at $40/barrel ($120 in todays’ money), companies of all sizes rushed to get in on the action. It was kind of the Permian Basin of its day.

Two happenings conspired to end the boom. The oil price dropped from $40 to $10 and the exchange rate shifted from 10 Francs/Dollar to 4. The price of a barrel in local currency dropped from 400 to 40 francs per barrel! Just about everyone shut up shop and left. I was left holding the baby of ‘one of France’s largest acreage positions.’ A bag full of buggy whips, as I explained in an earlier editorial. My title changed from CEO to Liquidator and I resolved to find a more stable form of employment that was not subject to the vagaries of the oil price. That didn’t happen!

In the mid noughties I was enticed back into France’s exploration scene as a part-time local contact for another operator. Boy!, had the music changed. Colbertism was still around, in that the central government called the shots. But in the interim, the Ministry of Industry had been conflated with the Ministry of the Environment. Ministers from both the left and the right were far less supportive of our kind of industry. Some were not very supportive of the environment either. One, Ségolène Royal of COP21 fame, was notably against any environmental measures that might be construed as ‘punitive.’ (Read, do nothing that might be unpopular!)

The effect on the ground was that the strong support that explorers had from regulations and officials evaporated. Our efforts fell into two categories. When we operated in ‘oil country’ we managed to drill. But elsewhere the lack of support from the authorities and the redoubtable efficiency of the green movement in generating protest at the local and national level made drilling impossible. When I say ‘efficiency’ I am being charitable. The internet was getting going as means of organizing protest, Gasland-induced fury was rife. Fake news about bribes and kickbacks circulated. I bowed out from the scene for the second time. There was just too much grief. Since, I’ve kept tags on French exploration which has carried on bravely. I even got hold of the domain name with the vague intention of doing some blogging. That didn’t happen either.

I must say that I had hoped that the new Macron government would treat oil and gas a little more kindly than its predecessors. But no. The new environment minister, one time TV star Nicolas Hulot, has given official backing to the environmental movement. I am tempted** to say that ‘no punitive’ environmental measures has been abandoned in favor of ‘unless the victims are small and unlikely to cause too much trouble.’ I am further temped** to observe that the brigade of protesters that travel around the country in diesel-powered vehicles are just about as likely to protest nuclear power stations, windfarms and just about anything else in their back yards. I confess that if it was my back yard, I, like Rex Tillerson, would probably be alongside them. Oh for Colbert!

* it was even easier since CGG (now in Chapter 11) actually did the work!

** temptation got the better of me!


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