French oil giant Total has bought a multi-million pound stake in a project prospecting for shale gas in Lincolnshire.
Total announced today it has snapped up 40% interest in two shale gas licences which cover 240 km2 in the East Midlands.
Under the deal it will spend a minimum of $19.5 million (£12m) in the project, possibly splashing as much as $46.5 million (£28m) in total.
Its partners in the project are GP Energy, a subsidiary of Dart Energy Europe, which has the next largest stake of 17.5%, Egdon Resources UK (14.5%), IGas (14.5%) and eCorp Oil & Gas UK (13.5%).
Patrice de Viviès, Total’s Senior Vice President for Northern Europe said: “This opportunity is an important milestone for Total E&P UK and opens a new chapter for the subsidiary in a promising onshore play.”
Total is already involved in shale gas projects in the US, Argentina, China, Australia and in Europe in Poland and in Denmark. Extracting shale gas has been banned in its home nation France.
Andrew Austin, CEO of IGas Energy said the entry of the first major into UK shale gas licences is “further endorsement” of the potential that exists following recent similar moves by Centrica for £160m and GDF Suez for £25m.
Today the Government announced local councils would get “millions in business rates” from shale gas developments.
In response, Greenpeace renewed its call for Prime Minister David Cameron to stop backing fracking.