Total Invests in U.K. Shale Gas
France’s Total SA said Monday it bought a 40% stake in two shale-gas exploration licenses in the U.K.—marking the first time one of the world’s major oil companies has turned its attention to Britain’s unconventional gas reserves.
The move is a tiny one by global energy industry standards—representing an initial investment of under $50 million, according to people familiar with the matter. Total didn’t announce Monday the amount it plans to invest. But Total’s decision is a significant vote of confidence in Britain’s shale-gas prospects, and could be a boost to the government in London, which has sought to lure big companies to develop shale.
Total is planning to spend about $45 million in drilling for appraisal in the two licenses, the person also said.
U.K. Prime Minister David Cameron said on Monday that local authorities that allow shale-gas development to go ahead will be able to keep the entirety of business taxes they collect from shale gas sites, up from the current 50%. This commitment will be directly funded by the government, the prime minister’s office said in a statement.
Total joins French utility giant GDF Suez SA and U.K. utility Centrica PLC, which last year bought interests in shale licenses in northwest England. French energy companies are eager to get involved in shale, but are unable to do so in France, where fracking is banned.
Des compagnies françaises qui sont obligées d’aller investir leur argent en Angleterre parce que l’exploitation des gaz de schiste a été interdite dans leur pays d’origine… Ce n’est pas sans rappeler ce qui se passe au Québec. L’été dernier, l’entreprise québécoise Junex a annoncé qu’il n’investirait plus au Québec, préférant se concentrer sur ses projets au Texas…