Analysts cautious over mega oil find near Gatwick

A small British oil producer has said it has discovered a possible world-class oil resource in the countryside to the south of London that could contain billions of barrels of oil.

The London-listed oil explorer UK Oil & Gas Investments said yesterday that up to 100bn 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% and prompted the national press to dub the area “Britain’s Dallas”. Oil industry analysts struck a note of caution however.

“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,” UKOG chief executive Stephen Sanderson 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.

Mike Jakeman, of the Economist Intelligence Unit, said oil from the well was probably too expensive to produce at a time when weak Brent crude prices mean firms are favouring projects with lower costs.

Reuters