INEOS has announced a deal to acquire a 50% interest in seven IGas shale gas licences in the North West of England (the Bowland licences). This consists of a 60% interest in three Petroleum Exploration & Development Licences (PEDL’s 145, 193 and EXL273) and a 50% interest in a further four licences (PEDL’s 147, 184, 189 and 190).
In Scotland, INEOS will acquire IGas’ entire interest in PEDL 133 (the Grangemouth licence), which will give the company 100% ownership of this asset. In addition, INEOS has the option to acquire 20% in two IGas East Midland shale gas licences (PEDL’s 012 and 200).
“This is a great opportunity to acquire some first class assets that have the potential to yield significant quantities of gas in the future,” said Gary Haywood, CEO of INEOS Upstream. “INEOS believes that an indigenous shale gas industry will transform UK manufacturing, and that we can extract the gas safely and responsibly. We are pleased to have agreed this deal with IGas. INEOS’s scale, asset position across the UK, US shale gas expertise, and our expertise in managing oil and gas facilities will be a great match with IGas’s existing onshore asset base, and significant exploration and production capability.”
INEOS is paying IGas a cash sum of £30 million and additionally committing to fund a two phase work programme of up to £138 million to develop the sites. IGas will reimburse its share of the work programme to INEOS upon commencement of commercial production.INEOS believes its knowledge and experience in running complex petrochemical facilities, coupled with its world class sub surface expertise, means that it will be seen by many shale gas communities as a responsible operator. INEOS has also committed to full consultation with all local communities before proceeding with any shale gas development.
“This is a further significant step for INEOS in its plan to become the biggest player in the UK shale gas industry. We believe shale gas could revolutionise UK manufacturing and INEOS has the resources to make it happen, the skills to extract the gas safely and the vision to realise that everyone must share in the rewards for UK shale gas to be successfully developed,” said Haywood.
Macquarie Capital (Europe) Limited acted as financial advisors to INEOS.
Adapted from press release by Rosalie Starling