French oil giant Total is planning to spend $50 million on shale gas exploration in Britain’s East Midlands with the acquisition of a 40% stake in two licenses.
Total acquired a 40% stake in two shale gas exploration and production licenses in the Gainsborough Trough in central England, making it the second French company to invest in British shale potential, while hydraulic fracking remains banned in France.
The central English license area—PEDL 139 and 140, in the Gainsborough Trough geological basin--covers around 240 square kilometers and is believed to be rich in shale gas resources.
Last October, another French company, GDF Suez struck an exploration deal in the same area, producing its first natural gas earlier this month.
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Total’s acquisition of a 40% stake in the licenses reduces the stake of other partners in the deal, including US-based eCORP, Australia’s Dart Energy and UK-listed IGas and Egdon Resources.
Dart will retain a 17.5% stake, while IGas and Egdon will keep 14.5% each and eCORP will retain 13.5%.
Last year, new studies were released estimating huge shale potential in the United Kingdom. Some estimates say the UK could have as much as 1,300 trillion cubic feet of shale gas under 11 counties in central and northern English.
In mid-December, the British government announced it was preparing to offer up fracking licenses across some two-thirds of the UK’s entire territory for shale oil and gas exploration by next summer as London eyes the drilling of over 2,800 new wells.
The shale push would have the potential to supply about 25% of the UK’s annual gas needs and create up to 32,000 jobs, according to a government-commissioned report by engineering giant Amec.
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A new map published by the British government shows that shale gas exploration licenses will be made available for almost every county in England on a 37,000-square-mile chunk of territory that stretches from the center of Scotland to the south coast.
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Companies will be able to apply for the new licenses next summer, but there won’t be an immediate drilling bonanza due the permitting process that follows.
Currently, there are 176 exploration license areas covering 7,300 square miles in the UK—mostly in Lancashire, Cheshire, Yorkshire and Sussex--and once the new licenses are offered up, only the county of Cornwall will be excluded.
By. Joao Peixe of Oilprice.com
