Global energy giant BP says it's pulling out of Ohio shale country...a move that will hit Trumbull County particularly hard. The announcement is a sharp turnaround for a company that just two years ago, spent $330 million for mineral rights in eastern Ohio. ideastream's Brian Bull reports:
BP announced the pullout from Ohio shale country as part of its first quarterly report of the year. The company is writing off more than half a billion dollars from its Utica shale play. The company described it as a cost cutting measure that will allow greater investment in other regions of the country.
BP has leases on more than 80,000 acres in northeastern Ohio’s Trumbull County. Its four active wells produced there produced disappointing results. Now, BP says it'll try to sell those leases to someone else.
Mike Chadsey, a spokesman for the Ohio Oil and Gas Association (OOGA), speculates that a proposed oil and gas tax -- and earthquake monitoring -- also may have played a role in BP’s decision.
"You have an uncertainty about the severance tax rate, you've got some uncertainty with some seismic issues," says Chadsey. "There's some risk-taking that's going to be involved. So I think that's when BP said, 'Hey….it's not going to work for us, but it'll probably work for somebody else.'"
Chadsey says there's still money and investment to come with the Utica.
Just last week, state officials reported a 28 percent uptick in Ohio’s natural gas production in the last quarter of 2013.