Total to challenge French government's revocation of shale gas permit

Total SA plans to challenge the French government's decision to cancel its exploration permit for a shale gas field in the Montelimar region of southern France.

"We respected the law and we do not understand why this permit was withdrawn on legal grounds," Total Chief Executive Officer Christophe de Margerie told French newspaper Les Echos.

Although the region under exploration consists mainly of shale gas reserves, Total said it is not committed to not using any technique that is banned by law—specifically hydraulic fracturing.

De Margerie told Les Echoes that France risked being left behind and compromising on security of supply if the government continued to prevent exploration.

“Be careful, we are making the security of supply of France not easy if we decide not to think of how to produce shale gas in a cleaner way,” he told the paper.

“De Margerie's strident tone perhaps belies a nervousness over the drift among European governments towards tighter regulation or outright banning of shale gas production,” said analyst Kash Burchett of IHS Global Insight.

The French government canceled exploration permits on shale gas fields in October after Total allegedly aimed to continue with plans to drill the fields using fracing.

France's Energy Minister Eric Besson and Environmental Minister Nathalie Kosciusko-Morizet said the permit had been canceled after Total submitted a mandatory report maintaining plans to use fracing.

The revoked permit, which covers the Montelimar region, was awarded to Total in March 2010 and encompasses an area of 4,327 sq km extending southward from below Valence to the region around Montpellier.

Total has until Dec. 12 to determine whether to ask the Energy and Ecology ministries for a detailed explanation for the cancellation of the permit or simply to file an appeal with the French courts.

Contact Eric Watkins at hippalus@yahoo.com.

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