Exxon Looking to Acquire UK Shale Asset

on Dec 17, 2012

It would seem that the lifting of the fracking ban in the UK has prompted the big boys to look into taking part in Britain’s shale gas revolution. On 16 December 2012, The Sunday Times reported that the Texas-based energy giant Exxon Mobil Corp (NYSE:XOM) had entered into talks to buy a stake in the Bowland shale project, owned by the London’s AIM-listed developer iGas (LON:IGAS). The iGas share price jumped 17% on the news up 13.25p to 90p a share.

**Exxon Mobil Eyeing Bowland Shale Gas Project**
The Times reports that the US oil and gas producer Exxon is considering buying a stake in the iGas-owned Bowland shale project near Lancashire. The interest in question is reported to be worth $400 billion (£245 billion). Cuadrilla Resources, which is currently the only company drilling for shale gas in the UK, has estimated that its share of the Bowland shale formation which stretches from the Isle of Man through the northwest down to the East Midlands, could hold up to 200 billion cubic feet of gas, which is equal to 70 years of supply.

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Recently, The Times reported that the British Geological Survey (BGS), which is currently carrying out an analysis of shale gas deposits, is expected to conclude that the Bowland Basin area of 1,000 square kilometres to the east of Blackpool has a deposit of 300 trillion cubic feet of gas, or 50 percent more than initially estimated.
**iGas Auction**

!m[The US Energy Giant In Talks To Buy A Bowland Project Stake](/uploads/story/1045/thumbs/pic1_inline.png)This summer, iGas launched a search for a partner to help it develop the Bowland project, with The Sunday Times reporting that major energy companies such as Shell (LON:RDSA, LON:RDSB, NYSE:RDS.A, NYSE:RDS.B), France’s Total (NYSE:TOT) as well as Norway’s Statoil (NYSE:STO) were also considering bids. “We have already received a number of expressions of interest from world-class companies to partner with us for what looks to be a highly significant opportunity,” said Andrew Austin, iGas CEO in a company press release at the time.

The Sunday Times notes that the auction which was supposed to be completed in four to five months was held up by delays to the government’s decision to lift the ban on fracking. The controversial technique was suspended in 2011 after Cuadrilla Resources was accused of causing two small tremors near Blackpool.
**Fracking Ban Lifted**
The UK Department of Energy and Climate Change (DECC) lifted the ban on exploratory hydraulic fracturing for shale gas, popularly known as fracking, on December 13, shortly after announcing its Gas Generation Strategy which highlighted the potential importance of shale gas in the UK’s future energy mix.

Reuters quoted Simon Toole, DECC’s head of licensing, exploration and development, as saying that lifting the ban on fracking could prompt companies to apply for exploration licences in the UK, whereas the Energy Secretary Mr Davey noted that he was prepared in principle to consent to new fracking proposals for shale gas. In a statement, iGas welcomed the recommencement of shale exploration in the UK, noting that it was looking forward “to working with the government to assess the potential of shale gas and to contribute to Britain’s energy security.”


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