Ineos Upstream, an Ineos subsidiary, has agreed to acquire an 80% interest in a petroleum exploration and development license in the Midland Valley, Scotland from Reach Coal Seam Gas Ltd. (Aberdeen, UK). This license area of 400 square kilometers is next to a separate license area in which Ineos acquired 51% of the shale layer last August. Ineos, as part of the latest deal, will be the operator of the license and it will fund the initial appraisal activity consisting of two vertical science wells and 100 sq km of 3D seismic. The key objective of the first phase of appraisal is to determine whether these resources can be economically extracted. The deal is subject to relevant regulatory approvals and it is expected to be completed within a few weeks.
Ineos Upstream is Ineos’s newly created oil and gas exploration and production business. The license of which Ineos bought a 51% stake in the shale section in August covers 329 sq km of the Midland Valley and it includes Ineos’s Grangemouth refinery and petrochemical complex. The British Geological Survey (Edinburgh) has identified significant shale gas and oil resources in this part of the Midland Valley, Ineos says.
“We are keen to move quickly to evaluate the potential of this resource, and determine if we can economically produce gas from this area,” says Gary Haywood, CEO of Ineos Upstream. “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.”
Specialists with the former Mitchell Energy & Development Corp., the company credited with perfecting shale gas extraction in the United States, are working with Ineos in the United Kingdom, Ineos says. “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,” Haywood says. “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.”
By Ian Yound