NEW YORK, March 21 Antoine Frerot, the chief
executive of Veolia Environment , said on Friday
he expects shareholders will approve his role to continue to
lead the French water and waste giant when they meet next month.
Frerot, who has survived two boardroom coups in the past two
years, received the support of the company's board last month.
The company's shareholders will meet April 24 to review the
"I ask all the shareholders, especially the non-French ones,
to vote," Frerot told Reuters in an interview.
Minority shareholders tried to oust Frerot in the Feb. 25
vote of the 16-member board which returned him to power. Those
who opposed Frerot were the French government's CDC holding fund
with 8.85 percent of the company's stock, the Dassault family
holding company with 5.99 percent, and institutional investor
Groupama with 5.20 percent.
"This coup has nothing to do with the future of Veolia or
the strategy of Veolia," Frerot said.
Frerot said his focus is on expanding into the energy
sector. Veolia already has a growing business in dismantling oil
and gas rigs in the North Sea and the Gulf of Mexico.
The company sees major potential to expand in the
collection, recycling and re-use of the vast quantities of fresh
or brackish water used in hydraulic fracturing and shale oil and
gas drilling operations, Frerot said. The company already
performs these services for driller BG Group in
Yet to expand into the U.S. shale plays, Frerot said he
would prefer a national regulation from the U.S. Environmental
Protection Agency, something the government has so far been
reluctant to do.
"The biggest market for shale gas today is the United
States, and that is where we see much potential," Frerot said.
Amid a shale drilling boom in the United States, less
stringent regulations about water usage have meant drillers have
been slow to seek more sustainable water management solutions.
Fracking wells often require several million gallons of
fresh water apiece, and the water, laced with chemicals and
impurities after drilling, is typically re-injected deep
underground where it cannot be used again as part of potable
That may change as competition for water resources heats up,
and water scarcity in energy-rich U.S. shale areas becomes a
bigger concern, Frerot said.
"In the U.S., regulation is not at the same level," he said.
"They do not ask to collect and treat all the water, but (doing)
this could solve the debate we have."
For instance, Veolia could offer U.S. drillers equipment and
infrastructure allowing them to process and re-use around 95
percent of the fresh water they deploy in shale areas, greatly
reducing quantities of water needed to sustain a drilling boom.
Making fracking less water intensive comes at a cost. Frerot
estimated that the cost of producing a million BTUs of natural
gas from U.S. shale is hovering around $4.
Those costs would rise to around $6 per MMBTU if drillers
want to re-use all the water, Frerot said. Even at $6 per MMBTU,
U.S. natural gas would be priced at a steep discount to Russian
gas supplies to Europe, which cost around $9 per MMBTU, Frerot
Still, with a drought parching Western U.S. states this
year, demand could accelerate for Veolia's water services in
shale fields, Frerot said.
"My feeling is that these water rights are more and more
contested," he said.
Strained freshwater aquifers in the arid West or high water
costs have prompted some producers to innovate. In Texas, Apache
Corp. is drilling dozens of Wolfcamp shale wells in the
Permian Basin and meeting its water needs for hydraulic
fracturing by using brackish water from the Santa Rosa aquifer.
It then recycles water from wells and fracking.
(Reporting by Ernest Scheyder, Joshua Schneyer and Terry Wade;
Editing by Diane Craft)