The Oil & Gas Law Review Edition 2 - France Chapter

Author:Mr Yves Lepage, Olivier Meledo and Tanguy Bardet
Profession:Orrick
 
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I INTRODUCTION

Located in more than 60 fields mainly in the Paris region and in the south west (Aquitaine Basin), French hydrocarbon deposits produced 790 tonnes of oil and 0.3 tonnes of oil equivalent (Mtoe) of natural gas in 2013, representing roughly 2 per cent of France's annual consumption.

Major recent developments in the French E&P sector involve the continuing debate around shale gas which started with the French parliament's ban on the use of hydraulic fracturing in 2011. Other adjustments include an extensive reshaping of the French New Mining Code currently in force (NMC), which was announced in 2012, but remains under review and is expected to enter into force in 2015 at the earliest; and the publication of a Decree No. 2014-479 dated 14 May 2014 extending the French state's control of foreign investments in certain strategic sectors, now including energy.

II LEGAL AND REGULATORY FRAMEWORK

i Domestic oil and gas regulation

Established in 1810 and revised in 2006, the NMC serves as the primary regulatory framework regarding oil and gas licensing, though publication of a new code is expected in 2015.

Pursuant to Article L. 111-1 of the NMC, the exploration and production of gaseous or liquid hydrocarbons reserves are submitted to the legal regime applicable to the development of mines. The legal regimes for both oil and gas are therefore identical with respect to the issuance of mining titles, the rights granted to the holders of such titles, the completion of works and the control measures applicable.

Other pieces of the legal and regulatory framework applying to hydrocarbons exploration-production activities include environmental provisions (Article L. 161- 1 of the NMC, cross-referencing the Environmental Code and the Estate Code) and decommissioning procedures (Articles L. 163-1 et seq. of the NMC).

In France, the operation of LNG terminals does not fall within production activities and the relevant regulation applying to LNG facilities is included in the French Energy Code which notably imposes certain public service obligations to the operators to guarantee the continuity and security of gas supply, and also provide for a tariff setting mechanism monitored by the Energy Regulatory Commission.

ii Treaties

France is a signatory to, and has duly ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the 1965 International Convention on the Settlement of Investment Disputes between States and nationals of other States, the 1994 Energy Charter Treaty and the 2004 Convention for the Protection of the Marine Environment and the Coastal Region of the Mediterranean (formerly known as the Barcelona Convention).

France is also a party to more than 120 bilateral tax treaties.

iii Regulatory authorities

The minister responsible for mines (currently, the Minister of Ecology, Sustainable Development and Energy) is the relevant French governmental...

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