French oil and gas company Total is set to invest more than £12 million in shale gas extraction in Lincolnshire.
The firm will get a 40% stake in two shale gas exploration licences in Lincolnshire, making Total the first major oil company to invest in shale gas in the UK.
UK’s IGas will be the operator of the initial exploration programme, and Total will take over ownership of the projects as they reach the development phase.
The deal is estimated to be a £12.7 million investment in the UK’s shale gas industry.
The area covered by Total’s shale gas extraction is in the Gainsborough Through, which is a geological basin part of the Pendleian Shale in Lincolnshire.
Total will be looking to drill two exploratory wells in this area, but the locations are yet to be announced.
Meanwhile, Lincolnshire County Council said it had yet to receive any applications for licenses for exploration drills within its boundaries.
The Environment Agency, the Health and Safety Executive and the DECC would also need to grant approval before drilling can take place.
In 2013, the British Geological Survey (BGS) revealed in a report the full extent of shale gas resource in Lincolnshire.
The BGS has also identified potential volumes of shale gas resources to the northwest of Lincoln, underneath Sturton by Stow, Marton and Gainsborough.
Prime Minister David Cameron also announced on Monday that local councils that back fracking will be able to keep all the business rates collected from shale gas extraction in the area, rather than the usual 50%.
There will also be a lump sum of £100,000 paid to councils when a test well is fracked, plus direct cash payments could be made to homeowners living near fracking sites, the PM said.
The government estimates councils would keep up to £1.7 million extra a year from each fracking site and hopes the project will help support more than 74,000 jobs and reduce bills for consumers.
There will also be a 1% levy on revenues from shale gas extractions, Energy Minister Michael Fallon added, and local councils would get up to £10 million for communities per a wellhead’s lifetime.
The minister expects 20 to 40 wells to be drilled in exploration over the next two years across the country.
In December 2013, Planning Minister and MP for Grantham and Sleaford, Nick Boles said the law would be changed to allow gas firm to put in fracking applications without sending letters to people about drilling beneath their homes.
Instead, companies would only be required to publish notices in local newspapers, put up displays in local parishes, and conduct a wider consultation.
Fracking is controversial
Despite the American boom in the practice, the impact of fracking on the environment remains hotly contested.
Contaminated drinking water is one of the biggest issues for the industry, but it is still not clear if such problems are caused by the fracking process itself, or from poor drilling practices.
Greenpeace Campaigner Lawrence Carter said: “Total, a French company who can’t frack in their own country because the French government has stopped the French countryside being ripped up, have now turned their sights on the UK countryside where the UK government seem happy to allow the industrialisation of our green and pleasant land.
“The UK government seem deaf to the risks fracking poses to our environment and local communities and are pushing ahead with selling off two thirds of Britain for drilling without a public mandate.”
Jane Thomas, Campaigner at Friends of the Earth, commented: “This is the first time that government money is being use to incentivise local communities.
“These community sweeteners also raise huge concerns about conflicts of interest if those councils who potentially will benefit from this money are also the ones who determine the planning applications from fracking companies in the first place.”