Doris Leblond
OGJ Correspondent
PARIS, Mar. 30 -- Higher world oil prices and modest costs of acquiring acreage have boosted the interest of small and midsize oil companies in Frances's mature exploration and production business.
The country's oil production last year fell 6.5% to a total of 1.14 million tonnes—about 22,800 b/d.
In recent years, companies with experience with mature fields as well as low overhead costs have taken over from the larger E&P firms. Case in point: Esso Rep, which sold its oldest oil field, Parentis, in 1997 to Vermilion Rep.
Also, high oil prices did not deter Esso Rep late last year from putting up for sale its entire Esso Rep affiliate, which owns all of its fields in France. The bid has elicited "a massive response," said Dominique Badel, chairman and CEO of Esso Rep parent Esso SAF. Following one or two selection rounds, a deal should be concluded early next year.
E&P investments
Fueled by high oil prices in 2004, exploration investments in France and its territories increased 32% over 2003 to 17.5 million euros, according to the French Industry Ministry's Office of Oil and Gas Exploration and Production. This year, investments are expected to reach 33.01 million euros. Expenditures were particularly high in the Aquitaine basin, where two deep wells were drilled.
In 2005, the Paris basin is expected to attract investments of 21.61 million euros, compared with Aquitaine's 9.88 million euros. Although it has been well explored, the Paris basin still attracts operators.
Last year, development and production investments nearly doubled to 70 million euros. Fifteen development wells were drilled, compared with three the previous year. Twelve wells were drilled in the Paris basin and three in Parentis and Lacq fields in the Aquitaine basin.
Drilling costs are higher in the Aquitaine basin than in the Paris basin. Investments are projected at 34.85 million euros in the Paris basin and 35.02 million euros in the Aquitaine basin.
Key operations
The three main operating companies¿Esso Rep, Total Exploration & Production France, and Vermilion Rep—still hold a 25% share each in oil produced in these basins, followed by Lundin Petroleum 15% and Madison Energy France 5%, which both increased their production last year.
Fields producing more than 80,000 tonnes/year account for 37% of France's total oil output: Vermilion Rep's Parentis field, 143,000 tonnes/year; Esso Rep's Chaunoy field, 98,000 tonnes/year; Total E&P-Esso Rep's Itteville field, 91,000 tonnes/year; and Lundin's Villeperdue field, 86,000 tonnes/year.
Most production of natural gas in France is operated by Total E&P in the Lacq area and is in decline. Total output fell 8% last year to 2.74 billion cu m.
