By TARA PATEL and NIDAA BAKHSH
Total became the largest oil company to enter the UKs
shale-gas industry through a $47 million investment in
licenses in eastern England.
Europes third-biggest oil producer will buy a 40% stake
in two exploration areas held by Dart Energy, Paris- based
Total said Monday in a statement. IGas Energy, which holds
14.5% of the permits, will become the operator.
Total is looking to explore for shale outside France, where
the hydraulic fracturing drilling method is banned. The
company is already involved in shale project
s in the US, where the boom
in output saw the country overtake Russia as the worlds
biggest gas producer in 2009. Now Britain is offering
incentives to open up its own shale industry as North Sea
The entry of a major such as Total into the UK shale
arena will give a significant boost to the nascent shale gas
supply chain, oil-services investor Epi-V said in a
The shale deal is the second in the UK by a French company.
In October, GDF Suez, Frances biggest gas supplier,
bought a 25% stake in 13 licenses in Englands Bowland
Basin from Brisbane, Australia-based Dart.
British Prime Minister David Cameron has pledged millions of
pounds to local authorities that approve shale developments,
part of a drive to create jobs and attract investment. He
faces opposition from environment
al groups and local
residents who say hydraulic fracturing, or fracking, may
pollute ground water.
Once the Total deal is complete, Dart will own 17.5% of the
licenses, which are part of the Gainsborough Trough and cover
about 240 square kilometers (93 square miles). Egdon
Resources will hold 14.5% and eCorp International LLC will
have 13.5%, the companies said in separate filings.
Cameron has proposed that local governments keep 100% of the
business rates they collect from shale-gas sites, double
their current share, according to figures released by his
office. That may equate to 1.7 million pounds ($2.8 million)
in central-government funding for each site every year.
The UK is also offering lower taxes to spur drilling. The
Bowland area, extending from east to northwest England, may
hold as much as 1,300 trillion cubic feet of gas, the British
Geological Survey says. Thats enough to meet demand for
almost 50 years, based on an extraction rate similar to US
Aside from Britain and the US, Total is involved in shale-gas
s in Argentina, China,
Australia, Poland and Denmark. In its home market, the
company is prohibited from exploring shale areas after France
outlawed fracking in 2011.