March 27, 2012 / 2:05 PM / 7 years ago

UPDATE 2-BP to lease land in Ohio's Utica shale

* BP to lease 84,000 acres in Ohio’s Utica shale

* Company eyeing liquids-rich gas in the play

By Selam Gebrekidan

NEW YORK, March 27 (Reuters) - BP Plc. became the latest major oil company to move into Ohio’s Utica shale patch on Tuesday after it reached an agreement with local mineral owners to lease land rich in natural gas and crude in the northeastern part of the Buckeye state.

BP announced it reached an agreement to lease 84,000 acres in Trumbull county, Ohio, with a group representing mineral owners in the county.

This is BP’s first foray into the Ohio shale prospect. The company, which says it is the sixth largest U.S. natural gas producer, has shale gas operations in Texas and Louisiana and the Eagle Ford shale play of south Texas, which has massive reserves of natural gas condensates and oil.

The Utica shale, which straddles eastern Ohio and western Pennsylvania is said to have massive reserves of oil and gas, although production figures are not yet available.

“One of the things we quite like (about the acreage) is the liquids-rich gas opportunity,” Tim Harrington, regional president for BP’s North America Gas business.

“The liquid component is what draws us there,” he added.

Earlier this year, French oil group Total SA bet$2.3 billion on Utica’s shale gas reserves after it reached a joint-venture deal with Chesapeake Energy Corp to take up the latter’s 25 percent stake in the shale play.

Exxon Mobil has already built a presence in the shale play through major acreage acquisitions last year. Other producers like Chevron, Hess, and Anadarko are also scouting for oil and gas in Utica.

BP, embattled by the 2010 oil spill in the Gulf of Mexico, has agreed to sell its southern gas assets in the North Sea as part of a $38 billion disposal program to pay for the spill.

The company did not disclose the terms of the lease agreement in Ohio, but said it followed three to four months of negotiations.

BP will sign individual leases with the mineral rights owners in the coming six months and appraise resources on the land after that.

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