PARIS, Nov 28 (Reuters) - France has rejected a request by U.S. firm Hess Corp. to explore for shale oil and gas near Paris, the energy minister said, despite assurances it would not use the fracking process banned by law.
Hess sought to take over seven permits granted in 2010 to Toreador, another U.S. company. A 2011 French law banning hydraulic fracturing, or fracking, had put the permits on hold.
Hess said it would not use the banned technology, but geological conditions in some of the permit zones would require it to resort to fracking, Energy Minister Philippe Martin said in a statement.
Also two of the permits have now expired and cannot be transferred to a new owner, he added.
France has blocked fracking, which involves pumping water and noxious chemicals underground, due to concerns over the environmental impact including possible contamination of groundwater.
Hess had also filed a legal case and is claiming compensation of 30,000 euros ($40,700) per permit. Martin said France would seek to reduce this amount at a Dec. 6 court hearing.
France's constitutional council last month upheld the ban on fracking, rejecting a challenge by U.S-based Schuepbach Energy, which held two permits that were cancelled.
The government's stance, while pleasing the Green allies of Socialist President Francois Hollande, has disappointed business leaders and France's industry minister, who see shale development as an opportunity to boost the ailing French economy.