In tomorrow’s budget Chancellor George Osborne is going to greenlight the £33Bn Crossrail 2 project. He reckons that Crossrail is a top priority scheme for London. He’s right.
London is the world’s second greatest city (after Brisbane of course). And I’m pleased London is taking its infrastructure seriously.
So, George – I have some good news for you. I might be able to help you pay for it. You see, there’s a damn good chance that there’s oil under London. Probably quite a lot of it!
The recent Gatwick Gusher oil discovery at Horse Hill, a mere 6 miles south of the M25, proved that those big thick juicy limestones in the Kimmeridge Clays, sitting only half a mile beneath the picturesque Surrey countryside, are full of the black stuff.
The Gatwick Gusher is the biggest onshore oil strike for a single well in UK history and it’s still early days. These limestones stretch across a vast area of southern England.
The Houston based advisers, the smart people at Nutech, reckon there’s 124 billion barrels (P50) of oil beneath the 1,200 square miles of the Surrey and Sussex countryside. And I think this number is still a tad conservative – the Weald Basin actually stretches much further than the 1,200 square miles that was mentioned back in April last year.
At the moment Horse Hill has produced some of England’s finest oil gushing to surface at a combined 1,500 barrels a day. And the testing continues. I can’t wait to see the final results. Imagine how many thousands of barrels a day could come from a few serious horizontal wells!
So, London itself?
We know there’s oil at Gatwick. Horse Hill has shown that. And the black stuff has been flowing from the same rocks 10 miles further south at Balcombe.
But those juicy limestone rocks and the Kimmeridge Clays that feed them happen to run north as well, and are known to exist within the M25. Follow the Kimmeridge geology further north and you end up in the North Sea.
I’ve had a good look at the data and I’m pretty bullish about this one. If I told you exactly where to find this oil beneath London, I’d have to kill you!
The Kimmeridge Clays, named after the tiny Dorset village of Kimmeridge on the Dorset coast of England, are arguably the most economically important units of rocks in the whole of Europe, being the major source rock for oil fields in the North Sea hydrocarbon province.
So we now seem to maybe have a bit of the North Sea in the south of England. But no one ever thought the Kimmeridge was mature enough in the South of England to have oil – let alone oil that flows. Until now.
Maybe George is dreaming of a new benchmark for oil – “West Sussex Intermediate”. “WSI”. That’s got a good ring to it and sounds better than West Texas Intermediate “WTI” or “Brent”.
The history books have been rewritten and even the scientists who doubted are starting to pay attention. You can’t ignore the fact that tankers of oil are actually heading off to the refinery and into people’s cars by now. It takes a few weeks to go through the system.
I even saw it on CNN yesterday.
This is a new oil discovery for the UK and a very exciting one.
Oil drilling in London? Now that’s going to cause a fuss! The NIMBY brigade will have a field day. ‘Not in my back yard’ I can hear the good citizens of Kensington and Chelsea shouting!
But these days oil extraction is an environmentally sensitive, low impact business – a bit like keyhole surgery. So little chance that people will even know the wells are there.
Tomorrow’s budget is going to be a challenge, with more cuts expected, and public finances looking less strong than people thought. So the prospect of serious oil underneath England, including maybe London, could be welcome news.
In other news, I’m just back from Cuba where the Cubans have finished drilling a well 7,000 metres horizontally under the ocean from land. Maybe Horse Hill could reach the M25 that way?
Now Cuban oil is a different story. More on this in later posts, but the potential there is beyond enormous, and I’m very pleased to be part of that now.