Released August 02, 2013 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - The U.K. is determined to kick-start a shale gas exploration boom by announcing significant tax breaks to attract investors.
The government is offering to halve the tax they pay on profits to get the shale gas ball rolling. In effect, shale gas producers will only have to pay 30% on any profits derived from exploration as opposed to the current 62%.
"Shale gas is a resource with huge potential to broaden the UK's energy mix," explained George Osborne, the U.K. Chancellor of the Exchequer. ""We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits. This new tax regime, which I want to make the most generous for shale in the world, will contribute to that."
The U.K., sees huge potential for shale gas. Last month, the country's Institute of Directors (IoD) stated that shale gas exploration could be a "new North Sea" for the country, which would lead to less gas imports, cheaper gas, and create tens of thousands of jobs and billions of pounds in revenue. The IoD predicts that a successful production run could lead to investment of up to £3.7 billion ($5.5 billion) a year, which would support a work force of almost 75,000. For additional information, see June 4, 2013, article - Shale Gas Boom Predicted for U.K..
Separately, a recent report from the British Geological Survey stated that approximately 1.3 quadrillion cubic feet of gas was contained within shale formations under the Bowland region in northern England -- around twice the amount that was previously predicted for the whole of the U.K..
Two companies, Cuadrilla Resources Ltd (Lichfield, England) and iGas (London, England), are exploring shale gas resources in the Bowland and Lancashire regions. In June, energy and gas heavyweight Centrica plc (OTC:CPYYY) (Windsor, England) is the first large utility to enter the nascent U.K. shale gas sector, when it bought a 25% share in exploration licenses on the Bowland shale for £40 million ($60.8 million) from Cuadrilla.
Mark Hanafin, Managing Director of Centrica's International Upstream business, explained: "With North Sea gas reserves declining and the U.K. becoming more dependent on imported gas supplies, it is important that we look for opportunities to develop domestic gas resources, to provide affordable sources of gas to our customers, and to deliver broader economic benefits to the U.K.. This transaction presents an attractive opportunity for Centrica to explore the potential and commercial viability of natural gas from shale in the U.K., while utilising its expertise as a responsible operator and developer of UK gas resources."
The U.K.'s drive to emulate the shale gas revolution experienced in the United States is in stark contrast to the anti-fracking stance taken by its closest neighbour, France. French President Francois Hollande recently lashed out against shale gas and the controversial process of extraction known as hydraulic fracturing, or "fracking".
He said: "The debate on shale gas has gone on for too long. While I am president, there will be no shale gas exploration in France."
Fracking was banned in France in 2011 but some companies which lost their exploration licences are challenging the decision through the courts. For additional information, see July 22, 2013, article - France To Keep Ban on Shale Gas.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The government is offering to halve the tax they pay on profits to get the shale gas ball rolling. In effect, shale gas producers will only have to pay 30% on any profits derived from exploration as opposed to the current 62%.
"Shale gas is a resource with huge potential to broaden the UK's energy mix," explained George Osborne, the U.K. Chancellor of the Exchequer. ""We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits. This new tax regime, which I want to make the most generous for shale in the world, will contribute to that."
The U.K., sees huge potential for shale gas. Last month, the country's Institute of Directors (IoD) stated that shale gas exploration could be a "new North Sea" for the country, which would lead to less gas imports, cheaper gas, and create tens of thousands of jobs and billions of pounds in revenue. The IoD predicts that a successful production run could lead to investment of up to £3.7 billion ($5.5 billion) a year, which would support a work force of almost 75,000. For additional information, see June 4, 2013, article - Shale Gas Boom Predicted for U.K..
Separately, a recent report from the British Geological Survey stated that approximately 1.3 quadrillion cubic feet of gas was contained within shale formations under the Bowland region in northern England -- around twice the amount that was previously predicted for the whole of the U.K..
Two companies, Cuadrilla Resources Ltd (Lichfield, England) and iGas (London, England), are exploring shale gas resources in the Bowland and Lancashire regions. In June, energy and gas heavyweight Centrica plc (OTC:CPYYY) (Windsor, England) is the first large utility to enter the nascent U.K. shale gas sector, when it bought a 25% share in exploration licenses on the Bowland shale for £40 million ($60.8 million) from Cuadrilla.
Mark Hanafin, Managing Director of Centrica's International Upstream business, explained: "With North Sea gas reserves declining and the U.K. becoming more dependent on imported gas supplies, it is important that we look for opportunities to develop domestic gas resources, to provide affordable sources of gas to our customers, and to deliver broader economic benefits to the U.K.. This transaction presents an attractive opportunity for Centrica to explore the potential and commercial viability of natural gas from shale in the U.K., while utilising its expertise as a responsible operator and developer of UK gas resources."
The U.K.'s drive to emulate the shale gas revolution experienced in the United States is in stark contrast to the anti-fracking stance taken by its closest neighbour, France. French President Francois Hollande recently lashed out against shale gas and the controversial process of extraction known as hydraulic fracturing, or "fracking".
He said: "The debate on shale gas has gone on for too long. While I am president, there will be no shale gas exploration in France."
Fracking was banned in France in 2011 but some companies which lost their exploration licences are challenging the decision through the courts. For additional information, see July 22, 2013, article - France To Keep Ban on Shale Gas.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
