France Examines Environmental Risks of French Guiana Drilling

The French government ordered a study into the environmental repercussions of drilling for oil in French Guiana following a landmark discovery by Tullow Oil Plc (TLW) earlier this year.

Initial findings on infrastructure, a tax regime and the environment will be ready by the end of the year before a final report in June, Industry Minister Eric Besson and Environment Minister Nathalie Kosciusko-Morizet said today in a statement.

Tullow, along with partners Total SA (FP) and Royal Dutch Shell Plc (RDSA), announced the first oil find in French Guiana in September, opening a new frontier in Latin America that has the potential to almost double the annual economic output of the overseas region of France. The discovery could eclipse Tullow’s Jubilee field in Ghana, which propelled the West African nation into the ranks of the top 50 oil states.

Plans to drill off French Guiana have drawn criticism from local environmental groups including Guyane Nature Environnement, which has called for tougher anti-spill measures and warned of the danger to the environment and fisheries.

The government mission is “aimed at anticipating steps that will allow development of hydrocarbon production in Guiana so that it respects the environment, is profitable for the territory and is a creator of economic wealth,” according to today’s statement.

The French probe will also examine infrastructure and logistical needs for oil companies as well as the creation of a “balanced” tax regime, the ministers said.

The results from the Zaedyus well will help test the “Atlantic mirror” theory of whether the Jubilee field can be replicated on the other side of the Atlantic, dating from when the African and South American land masses began to separate millions of years ago. Tullow and partners spent more than $200 million drilling the offshore well, which found light and heavy oil. The field could hold 700 million barrels of gross reserves in the Demerara Plateau’s Eastern Slope frontier, Tullow said.

French Guiana is an overseas region of France with a population of about 230,000. Tullow is the operator of the Guyane Maritime license with a 27.5 percent stake, while Shell has 45 percent, Total 25 percent and Northpet 2.5 percent.

Charles-Etienne Lebatard, a spokesman for Total, declined to comment, as did George Cazenove, a spokesman at Tullow.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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