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Amaury

Crombez – CEO, Geopetrol – France

20.04.2015 / Energyboardroom

The CEO of Geopetrol, the third largest producer of oil in France, provides insight into the company’s focus on mature fields and distribution of exploration activities by geographic area. He also discusses the company’s relationship with local authorities and civil society and the difficulties faced by E&P companies in regards to permit attributions today in France.

 

Could you please introduce Geopetrol’s key historical milestones, events, discoveries and developments?

Geopetrol was formed with a strong commitment to maintain the oil and gas production of old fields – known as mature fields – at a time when the oil industry economy was in down turn. The group’s founder, Gaston Rebilly, had a strong entrepreneurial spirit and a long experience of over 50 years in the oil industry. After creating Geoservices in 1958 (now part of Schlumberger), which then became the world leader for geological services for assistance to Drilling, known as “Mud Logging” and world leader of “Slickline” services for Well Intervention, he continued with Geopetrol in 1993, which operates on the entire chain of oil exploration and production operations.

The foundation of the company in 1993 stemmed from the observation that the production of certain fields was slightly waning and becoming less attractive to major players. With the knowledge of Geoservices, Gaston Rebilly had the idea of capitalizing on our know how to exploit and prolong the life of these mature fields, using the suitable means.

In the first years, our main objective consisted in acquiring fields and setting up professionals to optimize them. Over the years, we unveiled various projects. We recently acquired three fields in the southwest, which represent a significant development in our production. The integration of these new fields will push our production from 700 to 2000 barrels a day, and I must say that we are very proud to be involved in the regeneration of these sites.

Geopetrol is considered the third largest producer of oil in France. Can you please outline your production activity in relation to your exploration activity?

Our activity is well distributed across France. We exploit in all its existing mining regions: Alsace, which is very significant historically as it symbolizes our historical production site, the Paris Basin, which is also connected to the Champagne region, and the southwest of France, which constitutes our most valuable production capability since the acquisition of the fields I mentioned earlier. Oil production is our core business. We were also awarded three hydrocarbon exploration permits: two in the Alsace region and an exclusive license in the Paris basin. Moreover, we are involved in the energy transition. We started to investigate high-temperature geothermal resources in Alsace through an exclusive exploration permit granted in 2011 and actively support Sabella Consortium in the development of a submarine tidal turbine system that will be tested this year in the shores of Brittany. 

Are you planning on expanding your core business amid your diversification strategy?

We are indeed constantly looking for opportunities to expand our core business. We have team members who are solely dedicated to optimize the production on our fields. Monitoring, surveillance of reservoirs and well interventions are essential to that aspect of our growth strategy. We conduct studies to assess the costs and benefits of redeveloping certain fields by performing work-overs or drilling new wells. We take great pride in having our own geoscience, well intervention and exploitation teams. We are currently allocating major investments towards the fields recently acquired in order to adapt the surface installations.

How difficult is the exploration permit attribution process in France? Have there been blockages from local or national administrations?

I observe the relationship with local or national administrations depends on the region where the company conducts business. In the case of Geopetrol, to take the example of our facilities in the Alsace region, I haven’t observed any substantial public discontent towards our activities. Most people in Alsace are familiar with oil and gas activities and therefore are not disgruntled. In France, contrary to the US, the ground belongs to the state. Any company that wishes to obtain an exploration license must undergo a 15-month review process. The state assesses companies’ financial and technical capacities. The authorization to perform operations, in particular well drilling requires another process. This public investigation leaves room for the public to formulate interrogations and raise their concerns. I approve of this very transparent and healthy process. Local and national authorities follow the various steps of this course and we enjoy good working relationships with them.

What can the oil and gas industry do to restore their tarnished image?

Indeed some people seem to be concerned by the negative externalities of oil and gas production, especially within the context of the shale oil and gas debate. Many people in France are not aware that oil and gas are currently being produced on French soil, which makes me think that there might be an awareness-raising issue.

Do you think public opinion is partially shaped by its perception of shale oil and gas?

My opinion is very limited because Geopetrol doesn’t produce any shale oil and gas. I do believe however that the shale debate contributed to the public fears you were mentioning earlier. People’s concerns were sparked by the release of the film Gasland. These concerns show that the French population is more inclined to endorse activities related to energy transition.

Geopetrol publicly committed to the highest standards of HSE. How does that translate into your everyday activities?

The success of our industry is inextricably linked to safety and environmental awareness. Practically speaking, we are subject to very binding governmental regulations. Public authorities follow the course of our activities from the acquisition of the exploration license until the restitution or the transfer of the production concession. We ensure that our activities do not degrade the environment and the biodiversity around us. When we abandon a well, we prepare a safe and environmentally friendly exit strategy that needs to be approved by local authorities. Ultimately the land returns to its original use, agriculture usually.

What are the implications of plummeting hydrocarbon prices on your exploration and production activity?

Our business model relies on optimizing fields with as little costs as possible. We didn’t have to cut our investments in exploration for instance because they were already limited. Overall, Geopetrol is not severely affected like EPC players may be. However we remain cautious and may need to temporarily consider some arbitrage although we have a very long-term vision.

Could you also tell us a few words on Geopetrol’s international experience?

Aside this durable base in France, our activity in other countries could also be developed. Geopetrol invested in India in 1997 in a mature field “Kharsang”. Vietnam’s block 15-1 had a different risk profile in 2000, with a major exploration discovery. Other projects were successful in Myanmar in 2003, but others were more mitigate such as the one in Egypt in 2002 or recently in countries where it is difficult to operate.

Geopetrol has the strong spirit of an E&P company settled internationally. We are a small player compared to others, but used to adapt and adjust to local situations, and always aimed at preserving Geopetrol’s independence.

What are your objectives for the next five years in France?

My ambition is for Geopetrol to comfort its position in France and gain international exposure. I would really like to consolidate our production activities,enhance our geothermal project and see our tidal turbine activity mature. We need to be ambitious but also prudent and aware of our size.

 

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