While the debate over the possible use of hydraulic fracturing technology in the UK is still going on, French oil and gas company Total has announced plans to invest at least $21 million in the British shale industry.
The company will obtain a 40% interest in two shale gas exploration licenses in Lincolnshire, under an agreement with British energy firm IGas Energy. Total will pay $1.6 million in back costs and will provide funding to a work program related to the exploration licenses, with a minimum commitment of $19.5 million. However, the funding could reach up to $46.5 million, the statement from Total revealed.
The projects will be owned by Total and IGas (14.5 percent), as well as Dart Energy's subsidiary GP Energy Ltd (17.5 percent), Egdon Resources UK Ltd (14.5%) and eCorp Oil & Gas UK Ltd (13.5 percent). IGas will be operator of the exploration program and Total will take over the project in the development stage.
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Patrice de ViviËs, Total's senior vice president for Northern Europe, commented that the project was an important milestone for the company as it will open "a new chapter... in a promising onshore play." Shale gas projects in that part of Europe are not new to Total, which is already operating in Denmark and Poland, as well as on similar projects in the United States, Argentina, China and Australia, he added.
Total E&P UK is investing approximately $2 billion in the UK every year and is set to become the largest oil and gas producer in the country by 2015.