French oil major Total SA (NYSE: TOT) has extended an option with British shale gas developer Egdon Resources Plc to buy a stake in one of Egdon's shale gas licenses, the companies said April 4.
Egdon said in a statement Total had agreed on an option to farm into its PEDL209 exploration license in Lincolnshire by Dec. 31, 2018, which would earn it a 36% interest. Total's previous option on the license had lapsed.
In exchange, Total has agreed to then pay Egdon's expenses of an exploration program worth up to 13.47 million pounds (US$17 million), including the drilling of a well.
Large amounts of shale gas are estimated to be trapped in underground rocks and the British government says it wants to exploit them to help offset declining North Sea oil and gas output, create some 64,000 jobs and help economic growth.
But so far only one shale gas well has been fracked and progress has been slow over the past years due to regulatory hurdles and public protests. Environmental groups are concerned that fracking could contaminate groundwater and that it is incompatible with fighting climate change.
Total made its foray into Britain's shale gas industry in early 2014 when it bought a 40% interest in two licenses in the Gainsborough Trough area in northern England for up to $48 million from Dart Energy, now owned by IGas Plc.
In the U.S., Total has been building a sizeable presence in the shale oil market, most recently buying assets from Chesapeake Energy Corp. (NYSE: CHK) in September 2016.
Its strategy differs from that of French energy peer Engie SA, which last month sold its British shale gas interests to petrochemicals firm Ineos. (US$1 = 0.8031 pounds)
Permian oil production is expected to rise by 40,000 barrels per day to about 4.18 million barrels per day in April.
Spirit Energy has brought the Oda Field online in the Norwegian sector of the North Sea five months ahead of schedule and under budget.
Petrobras and partners have invested roughly US$30 billion in the exploration and development of the field.