More than 2 trillion cubic metres of shale gas exists in the Midland Valley in Scotland, the British Geological Survey has estimated.
A report from the earth science body found that the strip of land also contained six billion barrels of shale oil.
Exploratory drilling will be required to determine how much of this can be recovered.
Energy minister Michael Fallon said: “Making the most of Britain’s home grown energy is crucial to keep job and business opportunities, widen tax revenues and reduce our reliance on foreign imports.
“We know that shale gas alone won’t be able to supply all our energy needs, but the environmentally responsible exploration of shale gas could contribute to our energy mix.”