8th May 2014
InvestigatingBalcombeAndCuadrilla.com has seen evidence that the oil and gas company, Cuadrilla, believed it had to frack in the Sussex Weald to be successful.
For the past two years, the company has said repeatedly that it will not frack its oil well at Balcombe. Indeed, on January 23rd this year, Cuadrilla said: “We do not intend to hydraulically fracture the exploration well at Lower Stumble now or in the future”.
But a letter from the company to the Department of Energy and Climate Change (DECC) said it would need to carry out significant amounts of hydraulic fracturing in the Weald Basin to “achieve commercial production”.
The letter was marked for the attention of Toni Harvey, DECC’s senior geoscientist, and dated June 10th 2011. The author was Andrew Price, who identified himself as a director. The letter was on Cuadrilla Resources and Bolney Resources Ltd headed paper. (Bolney Resources Ltd became Cuadrilla Balcombe Ltd on 12th April 2013 and remains wholly owned by Cuadrilla Resources.)
Mr Price wrote: “In order for Bolney to be successful in its Weald Basin Kimmeridgian Oil Shale project (KOSP), Bolney will need to rely, to a significant degree, on being able to undertake hydraulic fracture simulation(s) of this unconventional reservoir.”
Earthquakes and time limits
At the time of the letter, the government had imposed a moratorium on fracking in the UK. This followed two earthquakes near Blackpool in April and May 2011, which were later linked to Cuadrilla’s fracking operation at its well at Preece Hall.
Andrew Price asked DECC whether the moratorium applied to all hydraulic fracturing in the UK – or just the Blackpool area.
This question was crucial to Bolney Resources Ltd because it was running out of time in Sussex. The letter acknowledged that the company had until June 20th 2011, under the terms of its licence, to undertake to drill one exploration well or give up – what the industry calls the “drill or drop” commitment. In case the moratorium applied nationwide (which it did), Mr Price asked DECC to extend the period of the drill or drop commitment until the end of the initial term of the licence. This is usually six years from the start of the licence (July 2008) so would extend the commitment period until July 2014.
PEDL 244 – the Balcombe area
Mr Price’s letter is headed PEDL 244, which refers to the Petroleum Exploration and Development Licence area 244. Cuadrilla makes no reference to PEDL 244 on its website but DECC’s licence data shows that this is the licence area in West Sussex, held jointly by Cuadrilla Balcombe Ltd (75% interest) and Lucas Bolney Ltd, a company owned by the Australian mining group, A J Lucas Group Ltd.
The PEDL 244 area includes the well drilled at Balcombe by Cuadrilla in 2013 and an earlier well, Balcombe-1, 10 metres away, which was drilled by Conoco in 1986-7. It also includes the Bolney-1 well, drilled by Esso in 1963.
DECC’s database of onshore wells shows that Cuadrilla’s other sites in the Weald are not in PEDL 244. A well at Lingfield in Surrey is in licence area PL055 and others at Cowden in Kent are in areas PL055 and EXL189. Cuadrilla says these sites are not active.
Mr Price’s letter to DECC makes it clear the company planned to frack. “Bolney’s exploration plan (and the reason for acquiring a 75% interest in the PEDL) has always been to drill (a) well(s) (vertical and/or horizontal) targeting the Kimmeridge Shale and to hydraulically fracture stimulate several select intervals within this unconventional reservoir in order to establish commercial production rates and to establish and develop a significant recoverable resource.”
The paragraph ends: “Without the ability to undertake hydraulic fracture operations Bolney will not be able to attempt to achieve commercial production.”
According to Duedil, Andrew Price is a director and the accountant for Cuadrilla Balcombe Ltd. He is also listed as a current director of five other companies, all owned by Cuadrilla Resources Ltd. His Linkedin page lists him as financial director of Cuadrilla Resources Ltd. Duedil also lists him as the company secretary of the parent company, Cuadrilla Resources Holding Ltd.
Kimmeridge Oil Shale Project
Mr Price refers in his letter to the KOSP or Kimmeridge Oil Shale Project. There is no reference to this on Cuadrilla’s website either. But it is mentioned by the A J Lucas Group Ltd.
The most recent reference we could find was from October 21st last year, when Andy Lukas gave a presentation to the East Coast Gas Outlook conference in Sydney. His presentation was called “Learning from the UK Market: How they are working with communities.”
A map on slide 7 of the presentation labels the Weald with a yellow star and a caption with the following notes:
KOSP (EDL 244, EXL 189)
Kimmeridge Clay FM
Limestone Oil Play
Andy Lukas, according to his page on Linkedin Australia, has been a director of the A J Lucas Group since February 1975.
Seeking more information
On April 16th InvestigatingBalcombeAndCuadrilla.com sent the references about KOSP to the PPS Group, Cuadrilla’s PR agency. We asked PPS to answer questions about:
- The location of the KOSP and any current well sites
- Production expectations
- Timescales for exploration and production
- Main investors
- The target rock formations
- Which rock formations required conventional production and which required hydraulic fracturing?
PPS acknowledged the questions on April 24th. We sent a reminder on April 30th but heard nothing back. We contacted the company again on May 6th and added a request for a response to the letter. PPS said it would get back to us. We’ll let you know about the response when it arrives.
FOI requests – DECC denies document exists
PPS and Cuadrilla are not the only people who seem reluctant to talk about Andrew Price’s letter to DECC.
When Mr Price’s letter came to light, Balcombe villager, Louisa Delpy, submitted a request under the Freedom of Information Act to DECC. On March 3rd, she asked for “all correspondence between DECC and Bolney Resources and/or Cuadrilla Resources in June 2011 relating to the PEDL 244 license and hydraulic stimulating/fracturing.”
DECC replied on 28th March:
“Your request has been considered under the terms of the Freedom of Information Act 2000 and the Environmental Information Regulations 2004. After checking our records and with relevant officials in DECC I can confirm that the Department does not hold any information which falls within the scope of your request.”
Mrs Delpy submitted another request on 31st March. This time she requested “all correspondence between Toni Harvey at DECC and Bolney Resources Limited and/or Cuadrilla Resources in June 2011 and July 2011.”
A DECC official replied on 30 April 2014: “I can confirm that the Department holds two pieces of correspondence which fall within the scope of your request. After consideration, DECC considers that elements of the correspondence are exempt from the right of access under the EIRs [Environmental Information Regulations 2004]. Redacted copies of the material are attached to this letter.”
The redacted copies comprised two emails. One is from Toni Harvey, which pre-dates Mr Price’s letter. The other is from someone at Cuadrilla Resources Ltd (name redacted) and appears to relate to the company’s work at Preece Hall. Neither document is, or mentions, the letter from Andrew Price.
Louisa Delpy said “I am disappointed that the two detailed FOIs I submitted to DECC seem to have missed this letter, and wonder what else has been missed when I have asked for further information from our gold standard, fully transparent, regulatory agencies.”
Mrs Delpy gave evidence last week to West Sussex County Council’s planning committee, which approved the latest application by Cuadrilla to flow test its well at Balcombe.
Responding to Mr Price’s letter she said: “This is proof of Cuadrilla’s true intention regarding Balcombe and the Weald – they always intended to frack. Whilst our County Councillors continue to ignore the cumulative effect of granting planning permission for flow testing in Balcombe the unconventional rocks will eventually require stimulation and fracturing for production in the Weald.”
Comment from Frack Free Sussex
Vanessa Vine, of the organisation, said: “This document raises several serious questions both for local residents and for people across the country.
“As the Balcombe site was not a viable production site in the 1980s, using conventional extraction methods such as those used at Singleton near Goodwood and Storrington – how can it suddenly be viable now? Why does the DECC not seem to be aware of their own correspondence with the operator? Why was the document not revealed through a Freedom of Information Act request to a local resident?
“The document clearly states that Cuadrilla acquired the site in order to frack it and that it will not become commercially viable without doing so. Which rather begs the question as to why a company would continue a costly operation which is not going to be making them money.
“Lord Browne said to me in person on 5th December 2013: ‘Cuadrilla is not going to fracture in Balcombe. It never has and it’s said it’s not going to do that’. Who is being deliberately misinformed here – the investors? Or the public?”
On 11 July 2014, Cuadrilla confirmed to Balcombe Parish Council that the letter was genuine. Link to parish council webpage
The company made the following statement to the parish council:
Cuadrilla can confirm that the letter from Andrew Price on behalf of Bolney Resources Ltd to DECC concerning PEDL 244 of 10 June 2011 is genuine however, as you know, we have subsequently drilled a well at Lower Stumble, Balcombe and obtained additional
geological and technical information which has confirmed that it isn’t necessary to hydraulically fracture at this location. Cuadrilla has therefore confirmed that we will not be carrying out hydraulic fracturing at the Lower Stumble site now or in the future.
We wrote to local residents on the 23rd January 2014 to confirm this and again on the 11th February 2014. The target rock – a limestone layer in the shale – underneath the Lower Stumble site is naturally fractured and the presence of these natural fractures
means that we do not need to carry out hydraulic fracturing.
Back in June 2011 Andrew Price wrote to DECC to request an extension to the initial term of the PEDL 244 licence. At the time we were unable to meet our licence commitments as our operational work plan (which at that time included hydraulic fracturing) was not
able to go ahead due to the suspension of hydraulic fracturing imposed by DECC. We therefore wrote to DECC asking for the initial term to be extended on this basis.
On 14th August 2013, two years after Mr Price’s letter to DECC, and after further geological analysis in the intervening period, our assessment was that it was not certain that hydraulic fracturing of the micrite (limestone) rock would indeed be required. Consequently we wrote to residents to confirm that at that time the exploratory work would entail the drilling and flow testing of an oil exploration well but would not include hydraulic fracturing (we also reinforced this in a letter on 3 September 2013 as we
were completing our operations). With the 14th August letter we attached a briefing note which clearly outlined what the potential outcomes could be after the well had been drilled and tested. One of the possible outcomes listed was that hydraulic fracturing would be required and another was that it would not be required. Our analysis following the exploratory operations in the summer of 2013 confirmed that the latter was the case and hence our written confirmation to residents early this year and the subsequent planning application, recently approved, which is for flow testing but not hydraulic fracturing.
We hope this clarifies the situation for you.