Oil and the French Economy
By RICHARD BAILEY IF the discussions on the possible entry of Britain into the Common Market have done nothing else they have made us much more aware of what goes on across the Channel. Names like Enrico Mattei, Jean Monnet, Louis Armond and Walter Hallstein can be dropped nowadays with reasonable certainty of producing an immediate reaction. At the same time the good old national stereotypes for the inhabitants of the European countries are still being overworked. This is especially true of France. There is, however, a dawning awareness of the fact that the French economy has achieved a much faster rate of growth than our own, and that this is connected in some way with the operation of the Monnet Plan. At the same time the peasants are still assumed to set the pace of development, although as befits a growing economy the fact that they now have tractors enables them to block the roads both more swiftly and more completely.
One factor that is generally missing from discus- sion of the French economy is the remarkable Change in the energy situation since the war, and the equally remarkable part that the French Government has played in this. When the Treaty Of Paris, which set up the European Coal and Steel Community, was negotiated in 1950 the rrench had a number of safeguards for French coal written into it. At that time Germany with over half the coal production of the ECSC was regarded as being the best placed of the Six. Since then the position of coal has deteriorated until it is almost reckoned a disadvantage to have a national coal industry to support. All the West European countries have been involved in this energy re-appraisal. But whereas the activities of flticco Mattei in the Italian oil industry have been Widely publicised, the French oil build-up has been largely the work of anonymous officials oPerating a whole series of exploration and pro- ducing and marketing companies whose identity IS hidden by non-committal initials such as CPF, RAP, SN REPAL and CREPS.
The objectives of French oil policy are simple and, of course, logical. The first is to build up supplies of crude oil from Algeria and the Sahara 80 that France will be able to do without supplies of crude oil from other sources. The second is to make France an important oil-exporting country, and the third is to secure preferential treatment for crude oil from any part of the French Com- munity in the Common Market.
These aims have been pursued by a mixture consisting of four parts dirigism to two parts free enterprise. The tight grip of the State on French oil interests dates back to the years after the First World War when the Compagnie Francais des Paroles (CPF) was started to take charge of the German share of the Turkish Petroleum Company, which had been handed over to France. CPF is now the biggest company operating in France with the Government owning 35 per cent. of its capital and controlling 40 per cent, of the voting rights. The management is on strictly com- mercial lines, however, and the Government leaves the running of CPF to the staff. In the 1950s CPF began to export crude oil as a result of buying a stake in the Iranian oil consortium. Today CPF has refinery capacity for 12 million tons of crude oil a year, but has something like 20 million tons at its disposal. Its subsidiary, Total Oil Products, is now selling petrol on a limited scale in Britain. The CPF was the forerunner of a whole host of concerns whose initials or abbre- viated names cover the French oil industry. The most important of these is RAP (Regie Autonome des Petroles), started in 1939 to search for oil in France. It found it both in the Paris Basin and in the foothills of the Pyrenees and used the pro- ceeds of these strikes to finance oil explora- tion in the Sahara, now the scene of its main activities.
Research and development for the oil industry is carried out by the Bureau de Recherches de Petrole (BRP). BRP has a majority holding in SNPA which operates the natural gas field at Lacq. In the Sahara BRP has a stake in some thirty operating companies, including a number in which the international oil companies are also interested. The method of bringing private capital into joiht ventures controlled by the French Government is a favourite policy device. The oldest established is CREPS, an exploration and production company operating in the Sahara in which Royal Dutch Shell has a 35 per cent. interest with the remaining shares mainly held by RAP. Outside the franc area the French are involved in searching for oil in Switzerland, Belgium, Greece, Spain, Portugal, Canada and in various Latin American countries. But it is the way in which the French have developed North African oil supplies that has really changed the national energy balance. Last year the African countries were producing a monthly average of 1.75 million metric tons. Algeria, Sahara, Gabon and the former French Congo together produced 16.5 million metric tons in 1961 compared with 10.5 million metric tons in 1960 with the greater part coming from the Sahara. The broad picture of France's oil supply now is that out of total imports of crude oil of some 35 million metric tons, 12 million come from the franc area, the rest from foreign sources.
The big question now is whether the French will be able to count on the continuing and in- creasing supplies of crude oil from North Africa. The future of the Sahara is one of the main questions for agreement with the Algerian rebels. The key area consists of two departments attached administratively to France which were detached from Algeria in 1957. Any settlement that involved taking this area out of French political control would create serious difficulties, but it is hard to see how the oil and gas resources could be exploited without French capital and know-how. The development of Saharan oil is one of the essentials to the future success of French industry in the Common Market, and it will determine the attitude France will take to the common energy policy which the Six are now trying to work out. The prospect of British membership of the EEC means that what happens to Saharan oil is going to be a matter of concern to UK industry from now on.
Previous page
