France is on track to become the first country to phase out all oil and gas exploration at its mainland and overseas territories.

France is on track to become the first country to phase out all oil and gas exploration at its mainland and overseas territories by 2040.

According to a draft bill presented on Wednesday (September 6), the French government will stop granting new exploration permits next year.

The plan is seen as a symbolic move from France, which produces about 6 millions barrels of hydrocarbons a year. That represents only 1 percent of its total consumption.

This legislation will “allow us to progressively free ourselves,” Ecology Minister Nicolas Hulot said after a cabinet meeting. “It will allow investors to go much further in their renewable investments. Currently oil and gas leave us dependent on geopolitics.”

Under the draft bill presented, no new exploration permits will be issued, and the government will be able to turn down more than 40 requests that have already been made. In addition, existing production licenses won’t be extended beyond 2040.

Some of the companies that could be impacted by the decision include Total (NYSE:TOT), Lundin Petroleum (STO:LUPE) and Vermilion Energy (TSX:VET,NYSE:VET).

“We do not expect this new legislation, if passed, to have a material impact on Vermilion as our operations are focused on development activities such as well-workovers, infill drilling and waterflood optimization,” the Calgary-based company said in its Q2 report.

Earlier this year, France outlined plans to end the sale of gasoline and diesel vehicles by 2040, a move that was followed by other countries such as the UK. “The target is a tough one,” Hulot said at the time. “But France wants to become the No. 1 green economy.”

According to the minister, the decision presented Wednesday to end oil and gas production shows the government’s commitment to climate change goals, and will enable others to follow its lead.

As part of its goal to eliminate net carbon emissions by 2050, France also plans to increase taxes on fossil fuels and invest more in renewable energies. But the country will continue to import and refine oil.

On Wednesday, West Texas Intermediate crude for October delivery was up 47 cents, or 0.9 percent, at $49.13 a barrel. Meanwhile, Brent crude surged 67 cents, or 1.2 percent, to $54.05 a barrel, trading around its highest level in over three months.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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