Ineos buys second Scottish shale licence
13 Oct 2014
Chemical company Ineos today acquired a majority interest in a shale gas development licence in Scotland’s Midland Valley.
Ineos Upstream has signed an agreement with Reach Coal Seam Gas to acquire an 80% interest in Petroleum Exploration and Development Licence (PEDL) 162.
This licence covers an area of 400 km2. It is located next to the development area covered by PEDL 133, in which Ineos obtained a 51% stake this summer.
We are keen to move quickly to determine if we can economically produce gas from this area
Ineos Upstream CEO Gary Haywood
As part of today’s deal, Ineos will be the operator of the licence, and will fund the initial appraisal activity (consisting of two vertical science wells and 100 km2 of 3D seismic).
The deal is subject to relevant regulatory approvals, and is expected to complete within the next few weeks.
Its announcement comes two weeks after Ineos founder Jim Ratcliffe announced his intention to offer 6% of Ineos’ UK shale production revenues to local communities affected by the firm’s activities.
“I am delighted to have concluded this deal in Scotland, which is a very good fit with our existing licence interest in the adjoining PEDL 133,” said Ineos Upstream chief executive Gary Haywood.
“We are keen to move quickly to evaluate the potential of this resource, and determine if we can economically produce gas from this area. If we can, it will provide a local source of competitive energy and raw materials to support manufacturing jobs in Scotland. Our recent commitment to share the benefits of the gas production with the landowners and the community will also bring significant local benefits.”
Ineos has recruited specialists from US shale firm Mitchell Energy to advise its fledgling upstream business on shale gas extraction.
“The former Mitchell Energy team were among the pioneers of the shale gas revolution in the US, and they bring a vast experience of successful shale gas production from various areas of the US,” said Haywood.
“We are confident that our US team, together with our own experts, can safely and efficiently develop a successful business in Scotland, which will play a part in securing the energy supply of Scotland and the UK.”
