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France Seen Pushing Oil Explorers Away on Lack of License Awards

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May 14 (Bloomberg) -- France’s failure to grant oil and gas exploration permits risks driving operators to other countries, a lawyer working for European energy producers said.

“Companies are not investing and I fear they may start to walk away,” Philippe Auzas, who represents companies from Royal Dutch Shell Plc to Mouvoil SA, said at a conference in Paris today. The hiatus has tarnished the country’s reputation for stable extraction laws, he said.

France has failed to issue exploration permits in the past two years as a commission rewrites the nation’s mining code, which will govern how and where licenses are granted. The suspension is a legacy of the previous government under President Nicolas Sarkozy, which halted new permits as it prepared a law banning hydraulic fracturing, or fracking.

About 120 exploration permits due to be awarded or modified have been affected by the lockdown, said the Union Francaise des Industries Petrolieres, the country’s oil industry lobby.

“The blocking of the permits is suffocating the industry,” Jean-Louis Schilansky, head of UFIP, said at today’s conference. “Political decisions are not being taken.”

Thierry Tuot, heading the mining-code commission, told a parliamentary hearing last month that a proposed new law to replace the code may be put before parliament in July. A spokesman for Energy Minister Delphine Batho couldn’t be reached for comment today.

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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