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Ohio Utica Shale

BP makes energy investment in Ohio

By admin Published: March 27, 2012

There is a new player in Ohio’s Utica shale: London-based BP.

The energy firm with Ohio roots announced Tuesday that it has acquired 84,000 acres in Trumbull County.

“We’re really excited about this,” said Tim Harrington, regional president for BP’s North American Gas business in Houston.

He said it would be premature to speculate on the company’s specific plans for the leased acreage.

The deal marks BP’s first involvement in the Utica shale that lies under eastern Ohio.

Terms of the deal with the Salem-based Associated Landowners of the Ohio Valley are confidential and were not released, BP said in a teleconference.

The nonprofit group pooled its acreage from about 1,000 Trumbull County landowners and negotiated the lease terms with BP.

It is the largest single lease arrangement in Ohio for natural gas drilling.

Spokesman Bob Rea declined to comment on the deal.

The lease agreement is expected to be signed in April.

The landowners’ group approved the package late Monday. Each acre owned gave a landowner one vote on the deal.

The Youngstown Vindicator reported that the deal will pay a landowner a lease bonus of $3,900 per acre plus royalty payments of 17.5 percent on product produced.

That could produce a financial impact of $331 million in Trumbull County for signing bonuses alone.

The majority of the acreage is in western Trumbull County.

The landowners’ group had earlier negotiated leases on 200,000 acres in nine counties.

BP said it expects to spend about six months signing leases with individual landowners before it begins assessing the potential of its acreage.

Being able to acquire such a large footprint made the deal appealing to the company, Harrington said. “It gives us a foothold and gives us a leverage of scale,” he said.

In a statement, Harrington said, “Our focus in 2012 will be to better understand the geology and to devise a plan to safely develop the resource.

“We’ve take the first step. It’s an initial step, but it’s still very early,” he said. “We like the potential productivity.”

The potential for not only natural gas but also for lucrative propane, ethane and butane was a big driver in BP making its decision, Harrington said.

The possibility of tapping into the propane, ethane and butane makes the Utica shale’s potential “very, very favorable” and appealing, he said.

To date, nearly 3.9 million acres in eastern Ohio have been leased for drilling.

BP is the sixth largest natural gas producer in the United States. It has 10,000 producing wells in seven natural gas fields.

It is involved in natural gas fields in Oklahoma, Louisiana, Arkansas, Texas, Wyoming, Colorado and New Mexico. It operates a gas-processing plant in Mississippi.

It is the second largest oil-gas producer in the U.S. States with a work force of about 23,000. That makes BP the country’s No. 2 oil-gas employer.

Its operations in Ohio date to 1870 with John D. Rockefeller, Standard Oil of Ohio and Amoco.

Today BP operates a refinery near Toledo in a joint venture with Husky LLC.

Bob Downing can be reached at 330-996-3745 or



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Utica and Marcellus shale web sites

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ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

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