UK Oil & Gas has announced a major oil find in the south of England, after analysing the results of exploration drilling at Horse Hill in the Weald Basin near Gatwick airport and north of Brighton. This has been the deepst exploration well drilled in the area for 30 years.
They describe the find as ‘of national significance’ and say that it appears to be the biggest onshore find in 30 years.
The total estimate for the wide area concerned is around 100 billion barrels – although geological comparisons with other oil producing areas across the world indicate that a realistic recovery would be between 3% and 15% of the asset.
A 10% extraction would see 10 billion barrels, which needs to be set in the context that 45 billion barrels have been produced across the entire North Sea area in 40 years.
This will be a substantial resource for the UK budget – and perhaps the scale of these plays will encourage the establishment of the oil fund we neglected when the sun was shining in the once upon a time North Sea bonanza.
While this will generate thousands of jobs, don’t expect production to start in the short term. The route from find to getting oil out of the ground is not a quick one and with the price of oil in the doldrums while the power play of OPEC against the USA shale producers continues, there is no incentive for speed.
The area is a shale reserve but local fears of frckig have been stilled by UK Oil & Gas Chair, David Lenigas [one of those strangely presciebt names], ruling out fracking as the extraction process. He has made it known that Horse Hill is ‘a conventional well, with conventional testing and we’ve got permission from the government authorities for a conventional programme’.