CAPITAL: Paris
MONETARY UNIT: Franc
REFINING CAPACITY: 1,865,223 b/cd
OIL PRODUCTION: 36,000 b/d
OIL RESERVES: 127.37 million bbl
GAS RESERVES: 505 bcf
France`s parliamentary production and trade commission voted to accept a European Union gas directive that could open up the French gas market.
The state monopoly Gaz de France dominated the domestic gas market, and labor unions were determined to keep it that way.
The French Industry Ministry approved Gaz de France`s plan to invest $1 billion internationally between 1997 and 2000. That will position the company better if the French gas market is opened to competition.
The government abandoned plans to increase diesel fuel taxes in 1998. Environmentalists wanted to raise the taxes because diesel was taxed far below the rates assessed on unleaded gasoline, 72% of the cost of the fuel vs. 80% for gasoline.
France had a higher proportion of diesel vehicles in operation than any other European nation: 40% of all private vehicles compared with 22% for all European Union countries, primarily because of the lower tax rate on diesel.
Meanwhile, Elf Aquitaine said it will market a fuel, Aquazole, in 1998 which is a less-polluting water-diesel mixture.
Tests with buses showed the fuel reduces carbon dioxide emissions 30% and particulates 50%. The fuel provides 3% less power than conventional diesel.
Vermilion Resources Ltd., Calgary, purchased from Esso France unit Esso Rep six oil fields in the Aquitaine basin, including Parentis field, as well as six other fields in the Paris basin.
Esso Rep retained Chaunoy, Vert-le-Grand, and Itteville fields in the Paris basin and Cazaux, Les Arbousiers, Les Pins, and Courbey-Cap in the Aquitaine basin.
Transportation
Gaz de France agreed to spend more than $526.5 million to build the 550-km, 900-1,100 mm diameter French section of a proposed gas pipeline linking Norway to Italy.
The pipeline would enable delivery of 6-8 billion cu m of gas Italy agreed to buy from Norway. GdF and Italy`s SNAM signed a 25-year transit contract.
Norway will deliver about 85% of the gas to Dunkirk, the terminus of the 840 km Norfra gas line, which will bring Troll field gas to Europe beginning in October 1998.
The other 15% will be delivered to Taisniere-sur-Hon, on the Belgian border near Valanciennes in Northern France, where Norway`s gas currently arrives in France.
SNAM will collect the gas near Basel, Switzerland, at the Transitgas pipeline that crosses Switzerland into Italy.
Work on the pipeline will begin late in 1999 and will be completed in 2001. It will connect with GdF`s existing system at a number of points.
GdF will also need to add compression on its 1,100 mm, 185-km Hauts de France pipeline under construction.
That 490 bcf line will link the Dunkirk terminal to France`s network north of Paris. Completion was due in late 1998.
Processing activity
BP Chemicals Ltd. planned to expand polystyrene production capacity at its Wingles plant in northern France.
When the program is completed in 1999, expandable polystyrene plant capacity will rise to 90,000 metric tons/year from 70,000 tons/year, and polystyrene capacity will climb to 200,000 tons/year from 120,000 tons/year.
BP was attempting to sell its 200,000 b/d Lavera refinery in southern France. Although the plant had returned to profitability, BP wanted to sell it due to overcapacity in that region of France.
BP denied claims that the refinery site had significant levels of subsurface contamination, up to 20 ft deep in some areas.
Shell France said it could cut capacity at its Berre refinery to 70,000 b/d from 120,000 b/d by taking a catalytic cracker out of operation.
The shutdown will trim regional refinery capacity only 10%, not enough to improve margins, and southern France refiners were expected to continue talks on how to reduce overcapacity.
The Industry Ministry reported that investments in French refineries would fall to $250 million in 1998 and then to $197 million in 1999 due to overcapacity, weak margins, and increasingly strict environmental controls on products.
It said one of the reasons for declining investments was the large amount the industry spent on boosting octane content between 1990 and 1994. Spending on desulfurization units also had been falling.
REFiners said their investment decisions for 1997-99 were being delayed by uncertainty over the European Union`s directive on fuel quality for the year 2000.
They said they were limiting investments only to improvements for safety and general environmental needs.
EU was considering a 0.02 wt % sulfur content for gasoline and a 0.035 wt % for diesel. Those thresholds would force more investments in conversion units, such as fluid catalytic cracking, distillate hydrocacking, and visbreaking, than refiners planned.
Lube oil investments remained high due to development of plants at Dunkirk by BP France and Elf France, at Gravenchon by Mobil, and at Nanterre by Shell.
