A small British oil producer says it has discovered a possible world class oil resource south of London.
HORLEY, ENGLAND, UNITED KINGDOM (APRIL 9, 2015) (ITN) – The London-listed oil explorer UK Oil & Gas Investments (UKOG) said on Thursday (April 9,) up to 100 billion barrels of oil could lie below the green fields around Gatwick Airport, however it cautioned that only a fraction of that could be recovered.
The news sent shares in the small firm up 200 percent and prompted the national press to dub the area “Britain’s Dallas”. Oil industry analysts struck a note of caution however.
Chairman of UK and Oil Gas David Lenigas said it that it was an important find.
“It’s a very significant discovery, 158 million barrels a square mile. The weald basin in itself is 1,100 square miles and … and we’ve got 55 square miles and it’s pervasive. It’s like a big sponge 1,500 feet thick with vast amounts of oil in it with three big limestones that you can effectively suck the oil out of the sponge.”
UKOG’s oil discovery is located in Britain’s southern Weald Basin, a largely rural area near the airport which lies adjacent to Europe’s largest onshore oil field, located at Wytch Farm.
To firm up resource estimates dozens of wells would need to be drilled across the basin area.
Lenigas also said that the find could become a key part of Britain’s energy resources in the future
“It’s a great find and there’s a lot more work to be done to bring it in to proper production, but eventually this will be a very key part of Britain’s strategic energy resource,” he said.
Britain has for decades relied on the North Sea for its oil needs, particularly during the 1980s when Margaret Thatcher’s government reaped the rewards of booming output and high prices. But output there has started to fade since the turn of the century.
Of the overall forecast 100 billion barrels, UKOG said it believed between 5 and 15 percent could be recovered, meaning that by 2030 the Weald area could contribute between 10 and 30 percent of the country’s oil needs, it said.
In comparison, Kuwait’s proved reserves amount to 101.5 billion barrels, according to BP’s annual statistics, while Britain has extracted 45 billion barrels from the North Sea since the 1970s.