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Julien

Moulin – Executive Chairman, European Gas Limited (EGL) – France

The chairman of European Gas Ltd. explains what inspired him to build an exploration and production company that operates on French territory. 

 

Could you please share with our audience the premise that led to the creation of European Gas Limited (EGL) back in 2012?

European Gas Limited (EGL) was actually founded in the 1990’s, as an ASX listed company focused on developing gas and Coal Bed Methane (CBM) projects in Australia. In 2004I created in Shanghai, with my partner Frederic Durr, my own asset management company focusing on Asia with a strong focus on energy and natural resources

I participated in a few success stories in the CBM sector in Australia and recognized the opportunity to development an ambitious CBM activity in Europe given the large amount of gassy coal present in various regions, the difficult gas supply demand situation and the extensive gas distribution infrastructure already available in Europe.t. In 2009 I decided the opportunity was mature enough so I decide to take the leadership of EGL, transform it into a French company and redevelop it as a pure French CBM player.

The initial assessment of the size of the opportunity was derived from the study of the date from numerous wells drilled by the Charbonnages de France and former operators such as Conocco in Lorraine (1 000 wells) and in Nord-Pas de Calais (600 wells). Therefore we don’t carry exploration activities per say. Indeed, thanks to predictive modelling we know the location of various coal seams and associated gas contents, which drastically limits the risks at stake. We have successfully demonstrated our ability to drill multi lateral wells in coal seams in France and produce high quality gas while complying with the strict environmental and regulatory constraints found in France. Contrary to belief, France is an underdeveloped with regards to domestic gas production. Our French Champions are successful abroad but there has been very limited activity in France over the past 15 years

EGL is currently engaged in gas exploration projects in various regions including Lorraine, the Jura basin and the North of France. How is your overall activity coming along?

Our activity is developing at a robust pace. We initially gathered all the necessary data, which we in turn entered into a Schlumberger detailed 3D geological model where we integrated former seismic lines and data from over a thousand wells. We subsequently drilled a few test wells, as control points to ascertain that the studies we had formerly conducted were accurate. Our objective was to demonstrate that coal had all the appropriate characteristics related to permeability, density and porosity and could thus be produced on a commercial scale. We continue to prove up gas reserves with our current drilling and production testing activity. The BEICIP, a subsidiary of the French Petroleum Institute (IFP EN) has so far certified over X TCF of contingent resources. In Lorraine these contingent resources represent at this stage over 3 years of national consumption in France.

Your explorations in the Moselle region have led to discoveries highlighting so far a production potential of nearly 28 Billion cubic meters of coal gas. How should France exploit this invaluable resource to reduce its energy dependence?

At the current stage, EGL is a fast growing SME focusing on proving up reserves in the Lorraine basin. Once in production, the company will not be able to change the energy dependence in France but will contribute to the energy transition and further reduce the carbon footprint by replacing imported gas by locally produced high quality gas that local gas users will consume.

How would you describe your relationship with local and national authorities? How were you able to earn the endorsement of local populations?

No production project in continental Europe can be carried effectively without establishing trusted relationships with local populations. We progressively bolstered our legitimacy by involving local stakeholders including NGO’s at the primary stages of the project. When a company conducts its operations in accordance with national laws, environmental standards and governmental regulations while being held accountable to local populations, there is no reason why it would be denied a permit attribution or renewal. Public perception towards our activity is distorted by the shale oil and gas debate, which has negative repercussions on the entire industry.

Since very few players are steering these activities in France, it is essential to address all concerns from the civil society in order to ensure the highest level of transparency. We demonstrate that we are capable of drilling wells on French soil and relying on French and European suppliers We don’t want to justify our operations by claiming that similar ones have been successful abroad but want to showcase the right example onshore France

I am confident in the quality of the work we carry out and alleviating the stakeholders’ concerns with regards to water protection and gas emissions. I must however underline that the top-down approach used by certain operator consisting in dealing with national authorities prior to engaging with the civil society is rather unsuccessful because our projects are inextricably linked with local communities. In the Lorraine region, we accomplished the remarkable feat of receiving unanimous support from all parties sitting at the local council including the Green party. Our door is always open if local officials and citizens wish to talk to us. We earned local approval in this region for a set of various reasons: Coal Bed Methane is high quality gas near existing gas distribution infrastructure; we revive and celebrate French mining history and create jobs and activities for local communities and businesses. For instance, the Lorraine region’s network of prestigious schools produces talented engineers who are unfortunately compelled to find work elsewhere. EGL’s project is an opportunity for them to apply to their skills and ambitions on a project that really has a positive impact for the region.

You founded an investment firm in China focusing on the energy sector. How has this experience been valuable to EGL from a business point of view, and what is your strategy to raise investors’ interest into your business?

My investment firm in China dealt with the energy sector overall: green energy, gas and coal. I have also been involved in various projects in Asia with its biggest involvement Chinese company Envision, the fifth largest wind turbine maker in the country. This experience equipped me with a very sound understanding of the dynamic of the global energy markets and key regional opportunities while exposing me to a network of seasoned professionals, some of whom I recruited to build for EGL a solid technical team.

Since 2011 it has become more difficult to raise money in France since foreign direct investments have crumbled and led to a less favorable general context. Moreover, the ban on fracking and the decision by the French government to revoke several permits damaged France’s reputation abroad and discouraged foreign investors specialized in the energy sector.

Still, we have seen and continue to see strong interest in our project which is one of the few successful oil and gas project onshore Europe. We will become more entrenched in investors’ minds now that we are proving gas reserves and progressing towards a full field development plan. This is where our approach makes a difference: our shareholders know that we have federated interests – local and national officials, regulatory bodies, some NGOs, academic partners – around our project.

How did someone with a remarkable financial background and professional experience in investment become passionate with energy matters?

I studied Finance at Dauphine University but often attended events and conferences held at their outstanding center for energy, the CGEMP (Centre of Geopolitics of Energy and Raw Materials). When I worked in the investment sector I immediately focused on energy and telecommunication. Energy is a fascinating field because it requires a thorough macro understanding of the overall dynamics coupled with a firm grasp on technological developments and geopolitics. The development via of a significant domestic supply of high quality gas onshore France using advance drilling technologies is the concrete expression of this accumulated knowledge.

 

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