Texan to drill in France's Paris basin

Australian:

A company from Texas believes that the rocks beneath the Paris Basin in central France contain billions of barrels of crude oil and it is gearing up for a drilling campaign early next year.

Craig Mackenzie, chief executive of Toreador Resources, a Dallas-based business, told The Times that state-of-the-art drilling techniques that had been refined over the past three years in Montana and South Dakota promised to unlock a treasure trove of previously inaccessible oil reserves under a swath of French countryside.

Toreador has secured the rights to drill in 750,000 acres of the Paris Basin, its licences stretching for hundreds of kilometres from St Dizier, on the edge of the Champagne region, to Montargis, just south of the royal palace of Fontainebleau.

It wants to start drilling three pilot wells early in 2010, at a cost of $US30million ($33.8m), and to be producing oil from them by the end of the year.

Toreador, which is listed on Nasdaq and is valued at about $US200m, said that it would cost $US1 billion or more fully to develop its licences in the Paris Basin. It believes that it could, within a few years, be producing 50,000 barrels of oil a day, worth more than $US3.6m at present prices.

Mr Mackenzie, an American oil engineer who worked for BP for 18 years, said that small amounts of oil had been produced using conventional methods in the Paris Basin since 1958.

"The Paris Basin is a world-class source rock," he said. "It is analogous to the Williston Basin (in Montana), the largest producing oil formation in the United States. The rock mineralogy is very similar."

Yet far bigger quantities are thought to lie locked in the region's rocks as "shale oil". This is the prize that Toreador is targeting and which has the potential to transform the Paris Basin into a significant oil-producing region.

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It is surprising that the French are more willing to pursue domestic production and Democrats are in the US. But then the French have been much more sensible when it comes to nuclear power too. This is a prospect worth watching.