An exploration company claims there could be up to 8.6 billion oil barrels onshore near Gatwick airport, with the potential to meet up to 30 per cent of the UK's needs.
UK Oil & Gas investments (UKOG) drilled a well at Horse Hill last year and said it has struck significant oil reserves that could hold 158 million oil barrels per square mile. The company’s licences cover 55 square miles of the Weald Basin in southern England.
Stephen Sanderson, UKOG’s CEO, said the Horse Hill-1 well required appraisal and testing to prove its commerciality but that it had the potential for significant daily oil production.
“We believe that the Horse Hill well has discovered a possible world class potential resource,” he said.
However, UKOG warned that only a fraction of the oil could be recovered due to the difficulty of the extraction, which would limit it to as little as five per cent of the total. The North Sea has produced about 45 billion barrels in 40 years.
“We believe we can recover between 5 per cent and 15 per cent of the oil in the ground, which by 2030 could mean that we produce 10-to-30 per cent of the UK's oil demand from within the Weald area,” Sanderson told the BBC in an interview.
The firm also suggested there was no need to use hydraulic fracturing, or fracking, as an extraction process to get access to the oil. It said that the oil 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”.
However, most experts believe fracking will be needed to get commercial quantities of oil from the region.
The widely contested method typically involves drilling down more than a mile and then horizontally to release the gas trapped in layers of shale by pumping water, chemicals and sand at high pressure underground.
In May 2014, the British Geological Survey estimated the Weald Basin to hold around 4.4 billion barrels of shale oil.
The price of an oil barrel on Thursday was $55.55 and although UKOG has an interest of just over a fifth in the Horse Hill site, shares in the company initially more than quadrupled in value on the announcement.
“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,” Sanderson said.