INEOS acquires majority stake in Scottish shale gas asset

INEOS Upstream Limited has 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 August 18, 2014 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.
 
Gary Haywood, CEO, INEOS Upstream, 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.”