CAPITAL: PARIS
MONETARY UNIT: FRANC
REFINING CAPACITY: 1,895,473 B/CD
OIL PRODUCTION: 28,500 B/D
OIL RESERVES: 145 MILLION BBL
GAS RESERVES: 506 BCF

The loss of a tanker off France in late 1999 had serious effects on the shipping industry through 2000.

The 24-year-old tanker Erika broke in half during a storm off Brittany Dec. 12, 1999. The French Environment Ministry said the ship spilled 15,000 tonnes of fuel oil, polluting 250 miles of coastline and killing more than 60,000 marine birds.

The Erika reflected the polyglot nature of the tanker industry: The shipper was French, the owner Italian, the crew Indian, and the flag Maltese.

The preliminary report of the French Bureau of Inquiries of Sea Accidents said corrosion probably caused a tank to rupture and the ship to founder.

TotalFinaElf helped recover the remaining cargo of 11,200 tonnes of oil from the ship, lying on the seabed in 400 ft of water 45 miles offshore. The company had chartered the ship.

As a result of the accident, the French government demanded that the European Union toughen regulations for older, single-hulled tankers.

Another accident saw the tanker Ievoli Sun go down in severe weather 12 nautical miles northwest of Alderney in the Channel Islands.

The Italian firm Marnavi owned the tanker. Shell France SA said the styrene cargo of the ship would not have a long-term impact on the marine environment.

The tanker was carrying 3,998 tonnes of styrene, 996 tonnes of isopropyl alcohol, 1,027 tonnes of methyl ethyl ketone, 170 tonnes of intermediate fuel oil, 45 tonnes of gasoil, and 16 tonnes of lubricants.

Federal issues

France's Constitutional Council struck the nation's proposed ecology tax, designed to enforce a reduction in industrial greenhouse gas emissions.

The council said extending the General Tax on Polluting Activities to include the corporate use of energy was unconstitutional because the complicated structure of the tax contravened the basic rule of tax equality. And it said since the purpose of the tax was to curb greenhouse gas emissions, it should not be applied to the electricity industry, where 80% of generation was from nuclear or hydropower sources that emit no greenhouse gases.

Representatives of the oil and chemical industries said they were pleased by the council's decision. The environment ministry said it would seek other ways to meet France's target of saving 15 million tonnes/year of carbon equivalent by 2010. The ecotax, had it been adopted, would have saved an estimated 2.5 million tonnes/year.

France's Council of Ministers approved a draft law implementing the European Union directive on gas market deregulation.

The government did not mention opening Gaz de France's equity to outsider firms like Electricite de France, TotalFinaElf SA, or other oil companies.

It said Gaz de France would remain state-owned and would have to devise a strategy for developing its upstream business, as well as its European and worldwide base.

The law would allow new gas distributors and suppliers to purchase or build gas pipelines. There would be no third-party access to GdF or TotalFinaElf's underground gas storage facilities.

Upstream

High oil prices pulled France's exploration and development out of its doldrums in 2000.

Exploration investments that had been dropping since 1995 grew 55% to 85 million francs, while development expenditures rose 59% to 457 million francs.

Operators drilled 19 holes in 2000, compared with four in 1999.

The Aquitaine basin accounted for 67% of the production investment and the Paris basin and other areas the balance. The main companies involved in exploration and development in 2000 were Elf with major work at Lacq gas field, Vermilion Resources Ltd. in the Parentis and Paris basins, and Esso Rep and Coparex Gascogne with developments on Permis de Lège.

Work programs for 2001 were expected to maintain the overall activity. Exploration spending was expected to more than triple to 345 million francs. Development expenditures were expected to fall to 361 million.

Despite the drilling recovery in 2000, oil production fell 7.5% to 1.423 million tonnes versus 9.9% in 1999, while gas production declined 2.6% compared with 7.8% the previous year, to 2.923 billion cu m.

The acreage covered by exploration permits was 21% less on Jan. 1, 2001 than a year earlier, falling from 49,636 sq km to 39,255 sq km as the number of permits fell from 38 to 33.