Three of the world's largest oil firms are in talks to acquire France-focused explorer Toreador Resources. BP, Royal Dutch Shall and Statoil are all thought to have signed confidentiality agreements with Toreador and have carried out technical due diligence on the firm's assets. Although US-based Toreador has a number of conventional oil assets in the Paris Basin, it is its potentially large shale oil deposits that have attracted the majors. The aforementioned big-hitters are no doubt looking to expand their exposure to European shale deposits. French energy giant Total has also shown interest in making a deal with Toreador but has since pulled out.
Toreador has the right to develop 2,626 square kilometers of acreage in the Paris Basin, with a further 619 square kilometres awaiting approval from the relevant regulatory body. The company's assets are mainly concentrated in the Charmottes and Necomian fields in the Paris Basin, which at the end of 2008 held proven (P1) reserves of 4.9 million barrels, mostly in developed permits. Average production in 2008 stood at 1,000 barrels per day (bpd).
While conventional oil production from its Paris Basin assets is unlikely to see much growth, Toreador is betting on the area's potentially large shale oil deposits, estimated to be around 65 billion barrels of oil in the Paris Basin Oil Shale. New drilling technology has opened up drilling for oil and gas in complex rock formations, including shale, which were previously uncommercial.
Underlining its commitment to its French operations, back in October of last year Toreador sold its other European assets, located in Hungary and Turkey. At the same time, the firm also said it was looking for a partner to enable a major evaluation of the shale prospects in 2010. Having successfully boosted its liquidity by reducing debt and cutting costs over the past year, Toreador has turned itself into a lucrative acquisition target, arousing the interest of a string of international oil firms which have been moving in a concerted way into unconventional oil and gas exploration in Europe.