BP, Europe's second-largest oil-producer, has signed an agreement with the Associated Landowners of the Ohio Valley (ALOV) to lease 84,000 acres of land in Trumbull County, Ohio, for future oil and gas production.
The deal follows Chesapeake Energy Corp's announcement a fortnight ago of its own natural gas and liquids project in Ohio, valued at $900m.
The terms of BP's agreement with ALOV, which represents mineral owners in the area, were not disclosed but the Ohio Department of Natural Resources estimates a recoverable Utica shale potential between 1.3 and 5.5 billion barrels of oil and between 3.8 and 15.7 trillion cubic feet of natural gas.
Lamar McKay, chairman and president of BP America, said: “BP is excited to expand our presence in Ohio in a way that will create jobs, bolster the local economy and provide additional sources of energy from an important emerging American resource.
“Over the last five years, BP has been America’s largest energy investor with vast experience in developing natural gas resources. We intend to bring our expertise and the highest industry safety and environmental management practices to this project.”
Tim Harrington, regional president for BP’s North America Gas, said: “We are very encouraged by what we have seen of the Utica/Point Pleasant formation. Our focus in 2012 will be to better understand the geology and devise a plan to safely develop the resource. BP is committed to hiring and purchasing locally whenever possible and we anticipate having a positive impact on the region while providing a new source of energy for America.”
BP operates the BP-Husky refinery near Toledo in a joint venture with Husky. BP’s North America Gas business has a presence in seven US on-shore basins.
The Ohio deal adds an important US energy source to BP’s on-shore gas portfolio.