France’s Mining Code to Increase Oil-Project Scrutiny

French oil and mining projects may be scrutinized at environmental hearings should a draft mining code be accepted into law.

Project proposals could be subject to public consultations, according to the planned legislation published on the website of lawyer Arnaud Gossement, who participated in a commission writing the new rules. The revised code would also change oil and gas taxes and make exploration licensing more transparent.

Energy Minister Philippe Martin and Industry Minister Arnaud Montebourg will hold a press conference today on the planned regulations, which have been debated by the government for more than a year. After France became the first country in the world to ban hydraulic fracturing, or fracking, in 2011, a succession of ministers vowed to rewrite the outdated legal framework to allow more scrutiny of oil and gas projects.

In the lead-up to the ban on fracking -- a drilling technique widely used in the U.S. to extract oil and gas from shale rock -- many criticized rules that allowed ministers to award hydrocarbon permits without public consultations or environmental hearings.

In the Dec. 5 draft of the mining code on Gossement’s website, the draft rules stipulate that information on permits be published. The code would also prohibit companies from using the pretext of industrial or commercial secrets or intellectual-property rights to block the public’s right to information.

Royalty Distribution

The new rules would allow local communities to benefit from royalties from mining and oil and gas extraction that are currently paid to the central government. The law would apply to onshore and offshore projects covering a range of minerals, hydrocarbons and geothermal installations.

Following the fracking ban, oil companies such as Hess Corp. complained that projects that use conventional drilling methods have been held up because of administrative delays.

France’s energy exploration and production industry is “threatened with paralysis” because almost 100 requests for permits are being blocked by the government, the country’s oil lobby, the Union Francaise des Industries Petrolieres, said Nov. 28. The group has said the government is delaying authorizations until a new mining code is adopted.

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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