French oil producer Total SA will be investing in UK shale gas through a 40% stake acquisition in two exploration areas located in the eastern part of England, Bloomberg reported. The $47 million deal makes Total the largest oil firm to pour money in shale gas in the UK, the report said.
In a statement, the third largest oil producer in Europe said it will be buying the stake in licenses that are held by Dart Energy Ltd and operated by IGas Energy Plc. Total is seeking for shale opportunities outside of its home turf in France where a ban is in place for hydraulic fracturing. The report said the method, more popularly known as fracking, has paved the way for a boom in the production of oil and natural gas in the US. Total also has shale gas undertakings in the US, Argentina, Australia, China, Denmark and Poland, the report said.
The report quoted Dart Chief Executive Officer John McGoldrick as saying that the deal to look for resources in a portion of the Bowland Shale formation Lincolnshire is meant to check the significant shale gas potential that are outlined in the relevant licenses. Last year, Dart also made an $80 million deal with French utility GDF Suez which will have the energy firm drilling as many as six shale wells in the UK in the next two to three years, the report said.
Meanwhile, Total said that the shale deal made through Total E&P UK "opens a new chapter for the subsidiary in a promising onshore play."
The report said Dart, through its subsidiary GP Energy Limited, will be holding a 17.5% stake of the UK project with Total. A unit of IGas will hold 14.5% while Egdon Resources UK Ltd will also have a 14.5% stake. A 13.5% stake will be held by eCorp Oil & Gas UK Ltd.
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