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by Staff Writers
Paris, 08 Nov 2012
The French environmental services group Veolia unveiled a new UK contract on Thursday and said it would pursue work in treating water used in shale gas drilling, to compensate for growing competition in its core activities.
Veolia said it would manage waste for the English city of Leeds in a deal worth 460 million pounds (575 million euros, $730 million) over 25 years, while chairman Antoine Frerot told a French newspaper that Veolia would become active in the shale gas sector.
"We have unique expertise to take a position on major environmental problems," he told the business daily Les Echos.
"We are one of only two actors worldwide that knows how to treat water from shale gas operations," Frerot said.
The controversial technique known as fracking uses water mixed with sand and chemicals to fracture rock and open up pockets of natural gas, but the water often then needs to be treated to prevent pollution of underground aquifers.
The sector offers an opening for groups such as Veolia and French rival Suez, which face growing competition in their traditional markets of water and waste treatment.
However, regarding a decision by the last centre-right government in France to suspend the search for shale gas within France on environmental grounds, the current Socialist administration made clear this week that it would not reopen the issue, despite a recommendation to this effect in a report on how to raise the flagging competitive position of the French economy.
The exploitation of shale resurces in the United States has given a big boost to the US energy sector.
On Wednesday, Veolia released nine-month results and said it would trim its heavy debt by 2.5-3.0 billion euros in the fourth quarter of 2012.
The group's debt stood at 15.2 billion euros at the end of September.
Veolia has sold waste treatment activities in the United States and water operations in Britain to raise money for debt payments.
As for its nine-month results, Veolia said operating profit had fallen by 25 percent from the same period a year earlier to 841 million euros, a result that was better than a decline of 27 percent forecast by analysts.
Nine-month sales gained 3.0 percent to 21.6 billion euros.
Finally, Veolia said it has recruited a new chief operating officer, but did not disclose the executive's name.
On Thursday, Veolia shares jumped by 1.86 percent to 8.14 euros in midday trading on the Paris stock exchange, which was up by 0.63 percent overall.
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