- INEOS Upstream Limited signs agreement to acquire an 80% interest in Petroleum Exploration and Development Licence (PEDL) 162,
- The licence covers an area of 400 km2 next to PEDL 133 (329 km2) in which INEOS owns a 51% stake of the shale layer.
- World leading pioneers join INEOS on-shore gas exploration team bring vast experience of successful shale gas exploration, development and production to the UK.
INEOS Upstream Limited has today signed an agreement with Reach Coal Seam Gas Limited (Reach CSG) to acquire an 80% interest in Petroleum Exploration and Development Licence (PEDL) 162, in the Midland Valley of Scotland. This licence area of 400 km2 is next to PEDL 133, in which INEOS already owns a 51% stake of the shale layer. As part of the deal, INEOS will be the operator of the licence, and will fund the initial appraisal activity (consisting of 2 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.
The British Geological Survey (BGS) has identified significant shale gas and oil resources in this area via the recent Midland Valley of Scotland report. The key objective of the first phase of appraisal is to determine whether these resources can be economically extracted.
‘INEOS Upstream’ is INEOS’ new oil and gas exploration and production business. The Business made its first move into the shale exploration on the 18th August with the purchase of a share of the shale section of PEDL 133. The licence covers 329 square kilometres of the Midland Valley of Scotland, which includes INEOS’ Grangemouth refining and petrochemical complex and the surrounding area.
INEOS Upstream CEO, Gary Haywood said, "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. 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."
Few companies in the UK have INEOS’ expertise or infrastructure to use and handle pressurised gases. It’s experience above-ground is widely acknowledged and now INEOS Upstream has engaged substantial sub-surface expertise into its business. World leading specialists from Mitchell Energy, the company credited with perfecting shale gas extraction in the USA, are now working with INEOS in the UK. Nick Steinsberger, Kent Bowker and Dan Steward have been working in shale gas extraction since the 1980s, and are regarded as leaders in their field. The team that pioneered the most effective method for safely extracting shale gas in the Barnett Shale in America, are now working exclusively with INEOS’ own on-shore gas exploration team.
"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. 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, and will bring significant economic benefits to the country and to the community," says Gary.
ENDS
Press contacts:
Richard Longden (INEOS) +41 21 627 7063
Mark Killick (Media Zoo) 020 7384 6980 or 07836 634449
Andrew McLachlan (Media Zoo) 020 7384 6980 or 07931 377162
Hannah Brandstaetter (Media Zoo) 020 7384 6980 or 07896 776554
Reach CSG - Miles Newman on +44 (0) 1224 646613 or email info@reachcsg.co.uk
Notes for editors:
- Reach CSG was awarded PEDL 162 in 2008 and since then has conducted extensive geological studies which have shown PEDL162 may contain large amounts of producible hydrocarbons.
- Reach CSG is a Scottish oil & gas company based in Aberdeen.
- The rocks of the West Lothian Oil-shale Formation formed from the sediments that accumulated 335 million years ago on the bottom of a large lake in a rift valley, much like that in present-day East Africa. These rocks are exposed in the Livingston area where oil from the shale was produced and refined during the 19th and 20th centuries. 75 million barrels of oil were produced during this time. About 150 years ago Bathgate was the first town in the world to use Natural Gas when it was supplied with shale gas. In the area of PEDL162 the West Lothian Oil-shale Formation is deep beneath the Central Coalfield.
- The British Geological Survey based in Edinburgh have studied the shales of the Central Belt. The British Geological Survey has published a range of total in-place oil resources for the Central belt is 3.2 - 6.0 - 11.2 billion barrels (421-793-1497 million tonnes) and a range of total in-place gas estimate is 49.4 – 80.3 – 134.6 TCF (1.40 – 2.27 – 3.81 TCM). TCF – trillion cubic feet; TCM – trillion cubic metres.