UK Oil and Gas Investments, the exploration, development, and production group, have just revealed that they have discovered somewhere in the region of 100 billion barrels of oil near Gatwick Airport.
The group said in a statement that there was potentially up to 100 billion barrels of oil onshore beneath the South of England. This was found after the company drilled a well at Horse Hill near the airport, in West Sussex, last year. The number comes from the fact that UK Oil and Gas said that the local area could hold 158 million barrels of oil per square mile. They are also using the management estimates which they were working from, these were confirmed last week on the BBC.
Stephen Sanderson, the CEO of UKOG, said in a statement, “Drilling the deepest well in the basin in 30 years, together with the ability to use concepts, techniques, and technology unavailable in the 1980s, has provided new cutting-edge data and interpretations to comprehensively change the understanding of the area’s potential oil resources.” Put in a slightly less roundabout way, with the new technology that is available, the oil industry can find and more effectively use oil which was previously undiscovered or was an untapped source.
Sanderson added in an interview with the BBC, “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.”
UK Oil and Gas were forced to acknowledge, however, that by its own estimates that only somewhere between 3% and 15% of the oil could be recovered, which is a rather low percentage when compared to similar geology in the US or West Siberia.
But this is an enormous relief for the British oil and gas industry considering that Scotland’s North Sea oil industry continues to battle dwindling oil production, which will only continue to fall. The Scottish North Sea oil industry has only been able to produce about 45 billion barrels in the past 40 years.
In 2014, the Organisation of the Petroleum Exporting Countries was able to display how the North Sea oil industry was in dire straits. The average oil output in 2013 from the North Sea clocked its lowest level since 1977 which marks a substantial problem in an age where oil grants power to nations. This is not just in terms of spending capabilities, but those who control oil are able to effect the gas prices which could radically alter the way the economies of the world operate.
This find could well represent a major shift in the UK’s representation in the oil market as a provider not just a buyer. That potential change could lead to an economic upswing far faster than we had previously anticipated, or it might simply mean that there our voice is now louder at the negotiating table. Either way if we are able to extract this oil it can only mean good things for the country as a whole as well as the individual companies who would benefit from this newly discovered well.