Story by The Guardian
An oil company claimed on Thursday that it had found 100bn barrels of oil close to Gatwick airport, sending the firm’s share price racing in the City and prompting immediate controversy with environmentalists.
The find would have “national significance” and be the largest of its kind in 30 years, according to the small independent explorer, UK Oil and Gas Investments (UKOG), which is working alongside a larger US firm on the project.
Shares in UKOG jumped more than 200% in frantic trading although veteran analysts dismissed talk of a Sussex oil boom as excessive hype.
UKOG admitted that while up to 100bn barrels may be in place 3,000ft (900 metres) below the Sussex countryside only 3-15% of the total would be recovered, based on similar finds in the US.
“We think we’ve found a very significant discovery here, probably the largest [onshore in the UK] in the last 30 years, and we think it has national significance,” Stephen Sanderson, UKOG’s chief executive, told the BBC.
Analysts suggest the Horse Hill oilfield – already dubbed by some as Britain’s Dallas – could hold 158m barrels of oil per square mile, a significant increase on reports last year that it could hold 20m barrels.
The majority of the oil was discovered when UKOG workers drilled the deepest well in the region in the past 30 years. Sanderson said the find would “comprehensively change the understanding of the area’s potential oil resources”.
He added: “Based on what we’ve found here, we’re looking at between 50 and 100bn barrels of oil in place in the ground. We believe we can recover between 5% and 15% of the oil in the ground, which by 2030 could mean that we produce 10%-to-30% of the UK’s oil demand from within the Weald area.”
The firm, which is working with Denver-based Magellan Petroleum, told investors more drilling and testing would be required to prove its commercial value – but that the well had “the potential for significant daily oil production”.
But senior analysts said a lot was being made of the find because of its interesting location and the fact that oil was in the public eye because of the drop in prices and the row over fossil fuels.
“Who knows at this stage whether this is a truly big discovery and how much oil is really recoverable. The City loves a frothy story like this,” said one analyst who asked not to be named.
UKOG has claimed it can extract the oil without resorting to the controversial technique known as fracking, where chemicals are pumped into the ground to bring out the oil.
But Keith Taylor, a Green Party MEP for south east England, said some experts disputed this while the discovery raised wider matters of concern.
“This huge oil find is the perfect opportunity for us to have an important national debate about keeping fossil fuels in the ground. The scientific consensus on climate change has never been greater and we have been told that the only way we have a chance of averting catastrophe is by leaving large reserves of oil in the ground.”
Brenda Pollack, a campaigner for green group Friends of the Earth said the prospect of “dirty oil extraction” in southern England would alarm local communities and put fracking firmly on the region’s election agenda.
“Any firm proposing to drill for oil in the region knows it will face huge opposition – as happened at Balcombe, Fernhurst and Wisborough Green. Drilling proposals in Sussex have already been turned down.”
Doug Parr, chief scientist at Greenpeace UK, said: “Dotting the English countryside with drilling rigs and pipelines to squeeze the last drop of oil out of Britain doesn’t make any sense.
“To gleefully rub your hands at a new fossil fuel discovery you need to turn the clock back to the 19th century and ignore everything we have learned about climate change since. We already have more than enough coal, oil, and gas reserves to fry the planet.
But Ken Cronin, chief executive of the oil industry lobby group UKOOG, said the public had no reason to be worried and he argued these kinds of finds could play a major role helping the UK’s economic recovery.
“We have been drilling for oil and gas onshore in the UK for over 100 years. There are a number of sites in the South of England that have been producing oil for many years with great care for the environment and with no impact on local communities.
“These initial results suggest a very large volume of oil in place, which could potentially help to stem the rise in oil imports and improve Britain’s energy security and balance of payments. Further appraisal work will be needed to test what could be economically and technically recoverable.”