* Ineos buys Engie's UK onshore oil, gas licences
* Deal brings Ineos' shale gas area above 1.2 mln acres
* Engie says sale is part of strategy to focus on
(Adds Engie comment, background)
By Karolin Schaps
LONDON, March 9 French energy company Engie
has sold its British shale gas interests to
petrochemicals firm Ineos for an undisclosed sum, the companies
said on Thursday.
Engie was one of the first big energy companies to back
Britain's nascent shale gas industry when it bought parts of
Dart Energy's licences, a company since then taken over by IGas,
Thursday's deal builds on Ineos' position as Britain's
largest shale gas company as it now has access to a shale gas
area of more than 1.2 million acres. The company, which recently
moved its headquarters from Switzerland back to Britain, wants
to invest 1 billion pounds into shale gas which it bets on as a
feedstock for its petrochemicals business.
Engie, on the other hand, said its retreat from British
shale gas was in line with its strategy to focus more on energy
infrastructure, like gas pipelines, and services.
"The decision was made following ENGIE Group's strategic
review notably in response to commodity price declines," said a
spokeswoman. Global oil prices have halved since hitting a peak
in mid-2014 and have also weighed on gas prices.
As part of the deal, Ineos is taking over Engie's entire UK
onshore exploration licence portfolio, that consists of
interests in 15 licences, including seven in which Ineos had a
"We are always going to be interested in acquiring
additional acreage," Gary Haywood, chief executive of Ineos
shale, told Reuters on the sidelines of an industry event.
He ruled out a large deal, however, saying the company's
interests were already substantial.
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.
Shale gas fracking firms IGas and Cuadrilla
confirmed the changes in licence ownership in which they are
(Additional reporting by Susanna Twidale; Editing by David