Vermilion to Buy Zaza Energy Assets With Possible Shale Reserves
Vermilion Energy Inc. (VET), the biggest French oil producer, will buy assets from ZaZa Energy France SAS to acquire interests in producing fields in the Paris Basin, which may contain crude reserves locked within shale rock.
Vermilion, based in Calgary, Canada, will pay $86 million for interests across 24,300 acres (9,834 hectares) in the Saint Firmin, Chateaurenard, Courtenay, Chuelles and Charmottes fields around the French capital, according to a statement today.
President Francois Hollande pledged to retain a French ban on hydraulic fracturing, or fracking, a drilling technique used to extract oil and natural gas from shale. The ZaZa assets had been held by Toreador Resources Corp., later merged with ZaZa.
French energy explorers, through the Union Francaise des Industries Petrolieres, are lobbying the government to research potential shale energy projects. Studies would be allowed under the ban’s provisions as long as they are overseen by the state.
“Research is possible on techniques other than hydraulic fracturing,” Hollande said yesterday. “It’s not banned.”
Toreador also had exploration licenses in the Paris Basin that it had intended to explore for shale oil. The licenses were transferred to Hess Corp. (HES) this year. “The acquired assets offer a strong fit with our current French operations,” Vermilion said. The fields produce about 850 barrels of oil a day.
Hollande said Sept. 14 he would uphold a ban on fracking in France, one of the two nations with the greatest potential for recoverable shale gas in Europe. He declined to create, as proponents of the method had hoped, a national commission for research into extraction techniques and shale reserves.
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