Industry

Local community to share Horse Hill oil revenues, UKOG’s boss promises

Stephen Sanderson2

The head of one of the companies behind the Horse Hill oil well said today he was committed to giving local people a share of any production revenues.

Stephen Sanderson, executive chairman of UK Oil and Gas Investments, suggested 1% could go to landowners and the local community.

He was speaking at an exhibition about the company’s plans for more drilling and testing at the well nick-named the Gatwick Gusher.

“I am committed to distributing some of the revenue of production to the local community. I think that is only right and proper.”

“I think a lot of people can see the benefit to the UK from oil and gas  – a boost to the economic, revenue for the exchequer, jobs and energy security.But if they are impacted, they ask what is in it for me?”

“If we produce oil I think it is right that the people actually benefit.”

Flow testing at Horse Hill in February and March attracted protests by opponents of the operation.

Asked by DrillOrDrop whether the offer of revenues would help make people more understanding of the company’s work, Mr Sanderson said:

“I don’t know. If it were me, I would sooner have the benefit than not”.

Asked how the payment scheme would work, Mr Sanderson said this had not been decided. He said:

“It would be a kind of wealth fund or trust, managed and distributed to the local community”.

It would, he said, be “something along the lines” of the community benefit scheme for shale gas. “We would utilise that. I might need to be tweaked.”

“We are talking hypothetically”, he said. But added that the conventional and unconventional oil and gas industries should have the same scheme.

But he talked about a “royalty for the landowner affected” and benefits for the “wider community”.

The shale gas community benefit scheme, being developed by the industry body, UK Onshore Oil and Gas, has said it will share 1% of revenues from production.

According to a community engagement charter, this would be allocated approximately 2/3 to the local community and 1/3 paid at county level. It also promises £100,000 for every shale exploration site. UKOG has not said it will pay at the exploration stage.

Initial tests suggested the flow of oil in the Kimmeridge layers were historically high for an onshore. Mr Sanderson described the rates as equivalent to those found in the North Sea.

He has predicted the Weald could provide supply 10-20% of UK oil consumption, currently running at 1.4m barrels a day. A study by EY predicted this could be produced from up to 100 wells across the region.

New drilling and testing plans announced for Horse Hill


This report is part of DrillOrDrop’s Rig Watch project. Rig Watch receives funding from the Joseph Rowntree Reform Trust. More details here

2 replies »

  1. It all sounds like a “win/win” for the local area. New jobs created, additional workers into the area spending money with local businesses and am added bonus of free revenue from UKOG when they make a profit. What is not to like?

  2. This is not a win/win for local residents. Our whole way of life has been blighted by this. Our houses have been devalued, we have noise pollution, light pollution and horrific smell pollution, additional traffic and we often can’t enter our properties due to protestors and police issues. In addition one local residents business has been seriously jeopardised as she has lost business due to the constant drilling if planning goes ahead for the next stage she is worried that her business will not survive. UKOG have failed to do the right thing by residents up till this time and there are no guarantees on any form of compensation when production commences.

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