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.