Owners of prospective U.K. shale acreage spurned interest from four of the world's biggest oil companies Exxon Mobil Corp., Royal Dutch Shell PLC, Total SA and Statoil ASA in favor of a deal with Centrica PLC, a person familiar with the matter said Friday.
The U.K.'s largest energy retailer Centrica, which owns British Gas, was favored due to its perceived ability to more easily maneuver through political risks, the person said.
"Centrica's expertise in the energy sector as both an operator and developer provides a welcome boost for the growth of shale gas in the U.K.," said U.K. Energy Minister Michael Fallon in a statement following Centrica's announcement Thursday that it would invest up to £100 million ($156.8 million) in the Bowland shale formation, initially acquiring a 25% interest for £40 million from Cuadrilla Resources Ltd., the U.K.'s leading shale-gas explorer, and Australian energy-and-mining company AJ Lucas Ltd.
The deal underscores the growing interest in U.K. shale gas reserves as the government there seeks to replicate the North American shale gas revolution that has transformed the U.S. energy market. It is hoped a shale gas boom could assist in shaking off economic stagnation by lowering the cost of energy for businesses and consumers, and creating jobs. No shale gas has yet been produced in the U.K.
Copyright (c) 2012 Dow Jones & Company, Inc.
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