A new report has said UK onshore discovery, Horse Hill, could create up to 5,500 jobs and be worth up to £52.6billion.
UK Oil & Gas Investments (UKOG) commissioned EY to produce a report on the Gatwick site’s potential.
The EY report read: “The development of Kimmeridge Limestone Oil in the Weald Basin, assuming it can be extracted from a development site at the volumes projected by UKOG, has the potential to generate significant economic value to the UK economy, partially off-set the decline in oil production from UK fields, support employment, and generate significant tax benefits to the exchequer.
“These benefits will be maximised via the development of a UK-based supply chain, and through a series of targeted policies and initiatives to appropriately mitigate potential barriers to development.
“Conceptual studies and oil in place estimates previously conducted suggest a significant opportunity for the UK to secure a proportion of its energy from the Weald Basin.”
Future peak oil production could provide approximately 4% to 27% of 2014 UK daily oil demand over the life of the project, according to the report.
The Gross Value Added to the UK economy could range from £7.1billion to £52.6billion, the project will generate between 1,000 to 5,600 jobs in the UK and lifetime tax revenues of between £2.1billion to £18.1billion, according to key findings.
Stephen Sanderson, UKOG’s chairman, said: “This report confirms UKOG’s view that the development of Kimmeridge Limestone oil in the Weald Basin can make a very significant contribution to the economy, employment and energy security of the UK.
“The report’s conclusions are given credence by the recent results of the highly successful Kimmeridge Limestone flow tests at the Horse Hill-1 oil discovery. The tests demonstrate that significant volumes of high-quality light oil exists within the Kimmeridge Limestones and can flow naturally to surface at commercial rates.
“The unexpectedly high aggregate flow rate of over 1365 barrels per day (“bopd”) from Horse Hill’s two Kimmeridge Limestones far exceeds the study’s modelled peak flow rate of 400 bopd per horizontal well. It is, therefore, possible that the overall economic impact of Kimmeridge Limestone oil could be significantly higher than this initial report describes.”
It comes after UKOG bought Angus Energy’s remaining 7.8% interest in the Horse Hill-1 oil discovery.
The £1.8million transaction increases UKOG’s stake in the onshore Weald Basin from 19.9% to 27.3%.
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