An interesting battle is brewing in the UK as the fledgling shale industry begins to step on the toes of London’s fat cat bankers. The problem is based on the fact that shale oil has been discovered in the idyllic countryside just to the south of London, known as the stockbroker belt, where average house prices are around 50% higher than the rest of the UK.
No complaints were raised by the southern stockbrokers whilst all the attention was on the giant shale gas reserves due to be developed in northwest England, but now that companies are considering the potential of areas in Surrey and Sussex, that the US EIA has estimated may hold 700 million barrels of recoverable oil, concerns are being raised, and protests made.
Related article: New Report Doubles England’s Shale Gas Reserves
The two basins in question are the Wessex and Weald basins, which Fiyos Spathaopoulos, a visiting lecturer of petroleum geology at London’s Imperial College who studied the basin for about seven years, told Bloomberg that “the rock in the Weald is splendid, it’s extremely good for shale oil. If it works, it’ll be big but we won’t know exactly how big until we drill.”
Anne Hall, a former county councillor in Balcombe, West Sussex, worries that “the possible impact on surrounding towns and villages would be catastrophic.”
Celtique Energie Ltd, a British-based oil and gas exploration company with subsidiaries and operations across Europe, and backed by the private equity firm Avista Capital Partners, is just one of the companies attracted to the UK by the government’s plans to offer tax breaks as an incentive to develop the country’s shale industry.
Bloomberg reports that Celtique will “drill a well next year at Fernhurst in West Sussex, where the average house price tops 471,300 pounds ($722,000),” and may then consider applying for a fracking license should the well find shale oil. Geoff Davies, the CEO of Celtique, explained that “the reason why we’re excited by this position is it has multiple objectives for both conventional and unconventional.”
Companies such as IGas Energy already operate conventional wells in the Weald and Wessex basins, but the fear is that the use of fracking would significantly increase the potential of the area, and therefore lead to a far larger number of wells.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com