The Government has handed out new licences for onshore gas and oil exploration in Gloucestershire, Somerset and Wiltshire.
A large area of Somerset has been earmarked for controversial fracking, the process of breaking up rocks deep underground to release gas as an energy source, while Wiltshire could see the extraction of methane from coal beds.
The Welsh company awarded the licences would have to apply for planning permission before carrying out any drilling.
Campaigners say the decision could open swathes of the region to controversial fracking.
Oil and Gas Authority chief executive Andy Samuel said:
Energy Minister Andrea Leadsom said:
The blocks on the above map relate to squares of land which the companies will have licence to explore for oil and gas, but they will still need landowner consent, Environment Agency assessments and planning permission before drilling can start.
The process could take several years before exploration, including fracking, takes place.
Friends of the Earth called on David Cameron to listen to the people of Gloucestershire, Wiltshire and Somerset after the Government issued new oil and gas licences for parts of the counties.
Mike Birkin, South West campaigner for Friends of the Earth said: