Gatwick oil find 'could produce billions of barrels'

UK Oil and Gas Investments (UKOG) said it had found a ‘world class potential resource’ in Sussex, but experts believe fracking is needed to extract commercial quantities of oil

An oilfield near Gatwick airport could hold up to 100 billion barrels of oil, according to a British exploration firm, in possibly the biggest onshore oil discovery in England since the 1980s.

The firm UK Oil & Gas Investments (UKOG) revealed it had found a “world class potential resource” after drilling 3,000ft below ground in West Sussex. However, UKOG said only 3-15% of the 100bn 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.

Shares in the company more than tripled in value in frantic trading. The shares jumped 203% to touch 3.3p by mid morning.

Offshore financial accounting

Analysts suggest the Horse Hill oilfield – dubbed 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 last 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 100 billion 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.”

In a statement to investors, the firm said that more drilling and testing would be required to prove its commercial value – but that the well had “the potential for significant daily oil production”.

Most experts believe fracking would be needed to extract commercial quantities of oil from the region.

However, UKOG has said that it is not intending to use the controversial method – which involves pumping water, sand and chemicals into rocks at high pressure. It said that the oil at Horse Hill is held in rocks that are naturally fractured, which “gives strong encouragement that these reservoirs can be successfully produced using conventional horizontal drilling and completion techniques”.

This news is reprinted from site http://www.theguardian.com/business/2015/apr/09/west-sussex-oilfield-could-produce-50-to-100m-barrels-of-oil

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