Rich oil reserves locked in rock formations outside Paris are about to be tapped in a new French-American venture that highlights Europe’s quest for new, diverse energy sources.
In a first for France, two companies have teamed up to produce shale oil from the Paris basin through a difficult and costly extraction process that involves blasting the rock with water and chemicals.
Toreador Resources and Hess, the leading producer of shale oil in the US, signed a deal last week for six wells, with the first one planned for later this year.
It marks the first time that France has opted for this form of unconventional oil exploration and the project will be submitted to President Nicolas Sarkozy’s government for approval.
“We know that the oil is there. The question is whether we will be successful in producing it,” Toreador vice president Julien Balkany said.
His company estimates potential reserves in the Paris basin at 65 billion barrels, but only a tiny portion of that can be extracted — between 0.5 and 1 percent.
Hess paid US$15 million to become co-holder of Toreador’s exploration permits and will invest up to US$120 million over the next five years in the Paris basin project.
The company, headquartered in New York, is already pumping 13,000 barrels from the Bakken shale play in the US state of North Dakota, bordering Canada.
“The technology we use to produce oil in US unconventional plays will have a direct application to the Paris basin,” said Greg Hill, president of exploration and production at Hess.
Contrary to conventional exploration, shale oil requires horizontal wells to crack open the rock over 4km or 5km at depths of 2,000m to 3,000m.
France has up to now shied away from such unconventional exploration, mainly because of the cost, but with oil prices rising again to well above US$70, the temptation to drill is strong.
“With [current prices] ... the viability of the project is guaranteed,” said Charles Lamiraux, head of oil exploration at the French energy ministry.
A first well will be drilled this year, with three possible areas — Chateau-Thierry, Leudon-en-Brie or Nogent-sur-Seine, all located a few dozen kilometers away from Paris.
While the world’s biggest oil shale deposits are in the US, Russia leads the list of producers in Europe and deposits have been found in a dozen countries.
There has been a recent push in Europe to tap into shale gas as European governments grow anxious over their increasing energy dependence on Russia.
France, which relies heavily on nuclear power to meet its energy needs, could cover 5 percent of its oil requirements through the new energy source, Lamiraux said.
It currently only produces 1 percent of its oil consumption needs, through production in the Paris basin and the Aquitaine basin in the southwest.
More than 800 exploration wells have already been drilled in the Paris basin, but oil production has dropped from 40,000 barrels per day in the 1980s to its current level of 10,000 barrels per day.
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