After several months of speculation, France's Total confirmed Monday that it has become the first oil and gas major to invest in UK shale gas licenses.
Total said it had taken a 40-percent interest in two shale gas exploration licenses: PEDL 139 and PEDL 140. These licenses are located in the Gainsborough Trough area of the East Midlands region of England, and they cover an area of approximately 90 square miles.
On completion of the deal Total's partners in the licenses Dart Energy Europe, Egdon Resources, IGas and eCorp Oil & Gas will hold stakes of 17.5 percent, 14.5 percent, 14.5 percent and 13.5 percent respectively. IGas will be the operator of the initial exploration program while Total will take over the project as it nears the development stage.
Commenting on the deal, Patrice de Viviès, Total's senior vice president for Northern Europe, said in a company statement:
"This opportunity is an important milestone for Total E&P UK and opens a new chapter for the subsidiary in a promising onshore play. The group is already involved in shale gas projects in the US, Argentina, China, Australia and in Europe in Poland and in Denmark, and will leverage its expertise in this new venture in the UK."
Speculation had been mounting about whether Total would make a move into UK shale gas since October after fellow French energy firm GDF Suez farmed into 13 of Dart Energy’s onshore licenses covering the western and eastern parts of the Bowland Basin in northwest England. The Bowland Basin has been estimated to hold gas resources of up to 2,281 trillion cubic feet by the British Geological Survey.
Total Chief Executive Christophe de Margerie voiced his frustration at his own country's shale gas fracking ban in February last year.
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