BP Enters Utica Shale, Leases Large Swath of Ohio

British oil giant BP (NYSE: BP) is entering the U.S. shale boom in Ohio in big fashion despite the continuing plunge in natural gas prices.

The company announced this week plans to lease 84,000 acres in the Utica shale play in Trumbull County north of Youngstown.

The Buckeye state lies on top of a potentially lucrative shale rock formation which could hold as much as 84 trillion cubic feet of natural gas that also spreads beneath Pennsylvania and the Appalachian Basin, the U.S. Geological Survey reported.

BP estimates there could be as much as 5.5 billion barrels of oil and 15.7 trillion cubic feet of natural gas in Ohio.

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, said Tim Harrington, regional president for BP's North America Gas business.

BP also said new natural gas drilling would add jobs and have ''a positive impact on the region.

The Associated Landowners of the Ohio Valley, which represents mineral owners, approved BP's lease proposal Monday, but each lease must still be negotiated with property owners.

BP is expanding its shale activity as some rivals have started to scale back. The reason is that so much activity has sent gas prices down.

Those scaling back include BG Group (LON: BG), another British oil company, Chesapeake (NYSE: CHK) and ConocoPhillips (NYSE: COP)

A rush of development of natural gas in the past several years has decoupled natural gas prices from crude oil which traditionally has help set its price.

On Wednesday, natural gas prices continued their fall -- down 1.22 percent to $2.27 for every 1,000 cubic feet on the New York Mercantile Exchange,

The price of natural gas hasn't topped $3 since Jan. 10. The commodity hit its highest price last June when prices closed above $5.

Oil on the other hand, remained above $100 Wednesday, trading at $105.57 a barrel on the Nymex. Shares of BP fell 16 cents to $44.74.