France slows down export guarantees for oil and gas industry

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PARIS (Reuters) – France will stop providing state export guarantees to projects involving dirty forms of oil such as shale from next year, followed by all types of oil from 2025 and gas from 2035, the Ministry of Finance announced on Monday.

FILE PHOTO: Bruno Le Maire, French Minister for the Economy, Finance and Recovery, wearing a protective mask, speaks during a press conference to present the 2021 budget of the French government following the weekly cabinet meeting at the Elysee Palace in Paris, France, September 28, 2020. REUTERS / Benoit Tessier

The French state has stopped giving export guarantees, which companies often need to obtain bank credit, to projects this year where fracking and flaring were involved and has also abandoned its financial support for coal developments. .

In a proposal to parliament on Monday, the ministry said guarantees would now also be suspended from 2021 for projects involving heavy oil, shale oil and tar sands, which would impact the creation of 700 new ones. jobs.

From 2025, public export guarantees would no longer be provided for the exploration and development of new oil fields, potentially at the cost of 1,800 jobs, followed by new gas fields from 2035, which could in turn affect 3000 jobs.

“We ultimately do not want the government to support fossil fuels abroad with export financing,” Finance Minister Bruno Le Maire told reporters.

The ministry said the later date for gas was because the fuel could help some countries as they transition to cleaner forms of energy. The Mayor said the deadline for gas projects could be brought forward depending on market developments.

Over the past 10 years, the government has provided export guarantees worth 4.5 billion euros ($ 5.3 billion) to the oil and gas industries, with 60% still outstanding in May, according to the finance ministry.

Among the major projects underway, the French oil and gas company Total TOTF.PA has failed to seek export guarantees for its $ 20 billion liquefied natural gas (LNG) project in Mozambique while no decision has been taken on a Russian LNG project in the Arctic in which Total is involved, ministry sources said.

The finance ministry has also proposed to remove export guarantees for thermal power plants with emissions above the recipient country’s national median from 2021.

The proposals will be submitted to parliament in the 2021 budget bill which is currently being considered by lawmakers.

Reporting by Leigh Thomas; Edited by David Clarke

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