Oil and Gas Exploration and Production in France - Administrative, Legal, and Fiscal Framework

1. Oil and gas exploration and productionin France -Administrative, legal and fiscal framework -Access to data DGEMP

2. MINEFI Organization GENERAL DIRECTORATE FOR ENERGY & RAW MATERIALS (DGEMP)

3. DGEMP organization Directorate of Energy & Mineral Resources - 1st Department Office of Mining Legislation

4. Missions of 1st Department(Hydrocarbon Resources Department) • Managing oil and gas exploration and production activities in France (office 1B or « BEPH ») • Analysing international oil and gas market evolution - assessing and ensuring oil and gas supplies by developing contacts with producing countries (office 1C) • Furthering development of competitive oil and gas and service industries, through cooperation with Institut Français du Pétrole (IFP) and a special fund for the support of oil and gas technical research (office 1A)

5. Missions of BEPH • participation, in association with other departments, in the procedures for review and renewal of oil and gas prospecting and production titles(1)(technical assessment, arbitration in the event of competition); • advising oil companies on the preparation of their applications; • updating of the oil and gas database of French subsoil, by collecting from the operating companies all data related to oil and gas exploration and production activity. • giving access to public data and information • promoting French oil and gas acreage (1) and also gas, oil products and chemicals underground storage sites

6. BEPH publications • Annual report • Oil and gas acreage map • Monthly bulletin • Well and seismic base maps (on request) • Web pages (French and English) at : http://www.beph.net/

7. Availablity of seismic data • 10 years confidentiality period for raw data • Processed and interpreted data remaining confidential • Possibility to view sections for quality check • Part of data stored by BEPH, but main part stored by the companies (mainly TOTAL, ESSO Rep) • Database (ACCESS + Mapinfo GIS)

8. Availability of well data • Complete collection of well reports and logs at BEPH • Confidentiality : • 10 years for offshore and field wells • immediately released for onshore exploration wells • Database (ACCESS + Mapinfo GIS)

9. Key figures on BEPH database • Seismic data : • raw data : number of media : 5,000 + • paper reports (field reports) : 2,000 • seismic sections (confidential) : 26,000 • Well data : • well project reports (confidential) : 4,000 • final well reports : 4,000 • final composite logs : 4,800 • well logs : 28,000 rolls • well cuttings : 8,500 boxes

10. BEPH database : digitalization progress • Seismic data : • raw data : cartridges and/or CDrom • seismic sections (confidential): .tif files (on CDRom) • Well data : • final well reports : > 2,000 out of 4,000 scanned and stored in .pdf format • final composite logs : 4,800 scanned, in .tif format • well logs : small part on tapes/cassette + scanning in progress since march 2005 (-> .tif files)

11. Role of mining legislation office(Bureau de la législation minière) • Redaction, in association with other departments, of new regulatory texts, or amendments to existing texts concerning mineral resources exploration and exploitation(1); • Review of legal aspects of applications; • Redaction of awarding texts. (1) and also gas, oil products and chemicals underground storage sites

12. Exploration permit awarding process • Application possible at any time, provided the chosen area is free (no exploration permit, no production title) • Application reviewed at the central and at the local levels • Competition process (90 days after publication of application in the EU Official Journal) • Duration : > one year

13. Awarding process diagram for an exploration permit (onshore)

14. Exploration permit terms - 1 • Three periods possible, 3 to 5 years per period • Area reduction compulsory at each renewal : • 50% at first renewal, 25% at second renewal • Relinquished areas freely chosen by owner(s) • Right of renewal conditioned by fulfillment of financial commitments

15. Exploration permit terms - 2 • No area limitation (grid pattern in “decigrades”) • No rental fees • Farm-in/Farm-out possibility • Exclusive right to apply for a production concession

16. Oil and gas production : specific tax system • Progressive Mining Royalty • Local Mining taxes • No surface rentals

17. Oil and gas production : specific tax system - 2 • Progressive Mining Royalty for new fields (according to annual production) • oil : 0 (< 50,000 tons) to 12% (> 300,000 tons) of wellhead value, • gas : 0 (< 300 million cum) to 5% (> 300 million cum) of wellhead value.

18. Oil and gas production : specific tax system - 3 • Local Mining taxes (2004 rates) • paid to local communities and « départements » (regional administrative division) • oil (new fields) : 2.17 euros/ t to local communities, 2.76 euros/ t to « département » (resp. 0.35 and 0.44 US$/bbl) (*) • gas (new fields) : 0.628 euros/1000 cum to local communities, 0.794 euros/1000 cum to « département » (resp. 17.8 to 22.5 US$/Mcuft) (*) (*) for 1 euro = 1.2 US$ and 1 t # 7.5 bbl

19. Mining acreage Applications and awardings Evolution of onshore acreage Evolution of offshore acreage

20. Applications and awardings

21. Evolution of onshore acreage

22. Evolution of offshore acreage