Europa Oil and Gas, the company behind oil drilling near the Leith Hill beauty spot in Surrey, announced this morning it was pulling out of the site.
In a statement to shareholders, it said the Forestry Commission was not renewing the lease for Bury Hill Wood, also called Holmwood. The current lease expires in just over a week on 12 September.
The statement said Europa would now be withdrawing its planning application seeking more time to drill an exploratory well at Bury Hill Wood.
The company said it was disappointed by the lease decision. Campaigners against oil operations at the site were celebrating today at the unexpected news. Leith Hill Action Group, which has been challenging the proposals since December 2008, said today’s announcement shows the value of continuing the fight.
This appears to bring an end to a near 10-year planning and legal battle with residents, campaigners and the council.
Europa was due at the High Court at noon today to request an extension to an injunction against protests at the site. Anti-drilling campaigners occupied the site for eight months until they were evicted in June 2017. They then moved across the road onto Forestry Commission land.
The Oil and Gas Authority recently extended the initial term of the exploration licence for the site until September 2020. This was the sixth licence extension for PEDL143. (DrillOrDrop report)
The first planning application was submitted on 1 December 2008. It went through two planning inquiries and two court cases before finally being granted three years ago in August 2015.
But no work was carried out on the site, except for water monitoring boreholes. The permission expired on 6 August 2018.
The most recent delay had been over approval of a traffic management plan, which was reportedly in its 14th version. A request to extend the planning permission had been expected to be discussed by Surrey County Council in November.
An Environment Agency permit was granted for the site in July 2018 despite a petition against it signed by more than 100,000 people and nearly 2,000 objections (DrillOrDrop report)
Today’s statement said Europa had been notified that the Minister for Environment, Food and Rural Affairs, had decided not to renew the lease at the exploration site.
“Following the Minister’s decision, the Company, on behalf of its partners, will be withdrawing its planning application to drill the Holmwood prospect from the Bury Hill Wood site.”
Europa and its four main partners (Egdon, Angus Energy, Union Jack and UK Oil & Gas plc) planned to explore the Kimmeridge limestone formation.
Europa said :
“The Company, with its partners, intends to undertake a full evaluation of alternative sites from which to target the Holmwood prospect, and other plays in the licence.”
Europa’s chief executive, Hugh Mackay, said:
“The Minister’s decision not to renew the lease at Bury Hill Wood is disappointing, however, we intend to continue to work closely with our partners to determine how best to take the licence forward. As well as PEDL143, Europa holds a multistage portfolio of licences which includes production and appraisal projects onshore UK and an industry leading licence position in the Irish Atlantic Margin. Various work streams are underway across our asset base to advance all our licences and in the process expose our shareholders to high impact drilling activity. With this in mind, I look forward to providing further updates on our progress.”
In an interview with Proactive Investors, Mr Mackay was asked if he believed protests at Horse Hill had been a factor in the decision on the lease. He replied:
“I don’t think it helped, put it that way. I can’t really speak for the Forestry Commission and DEFRA but I’m sure the presence of protestors wasn’t helpful from anyone’s perspective.”
David Bramhill, executive chairman of Union Jack Oil, said in a statement:
“The potential consequences of the Minister’s decision are minimal for Union Jack as it holds a balanced portfolio of ten attractive onshore licence interests in the UK, including producing assets at Keddington and Fiskerton, a development project at Wressle and a planned well at Biscathorpe to be drilled during October/November 2018.”
Mark Abbott, managing director of Egdon, said in a statement:
“The Minister’s decision is highly frustrating. However, we note the commitment of the operator to evaluate alternative sites and we will work with Europa and the joint venture partners to agree a forward plan for the licence. Meanwhile we will continue to progress our plans across our broad and extensive portfolio of UK projects.”
Stephen Sanderson, executive chairman of UKOG, said:
“The decision by the Minister for the Environment, Food and Rural Affairs, is disappointing, but not altogether surprising. As the Leith Hill Site was less than ideal, we now welcome the opportunity to plot a new way forwards to drill both the Holmwood prospect and other nearby prospective Kimmeridge targets in the near future.”
At the time of writing (9.20am) Europa shares were down 5.8% at 3.62p. Shares in the partner companies were also down: UKOG down 2% at 2.5p, Angus Energy down 3% at 7.15p, Egdon down 8.9% at 7.8p and Union Jack down 1% at 0.1p.
“The value of continuing the fight”
Leith Hill Action Group, which has campaigned against Europa’s plans for nearly 10 years, described today’s announcement as “incredible news”.
In a newsletter to members, Patrick Nolan said:
“We have learnt over the last ten years to be cautious on hearing good news. However, this does appear to finally be the end for Europa’s attempts to drill at this totally inappropriate site.
Over the last ten years, we at the Leith Hill Action Group have been told by many people in many circumstances that we were just fighting the inevitable. It has been put to me in radio interviews that it was pointless to keep going and that we should just let Europa get on with it. We have faced attitudes from public officials that we were just delaying the unavoidable. However, today’s announcement shows the value of continuing the fight.”
Mr Nolan said the group had “fought to ensure that every condition is met in full and every legal nicety is properly observed”:
“In three years since being granted permission, Europa have not been able to fulfil the conditions simultaneously imposed on them by the Inspector and it seems that their time has finally run out.”
“Inappropriate location for oil drilling”
Lucy Barford, of the campaign group, A Voice for Leith Hill, said:
“This is fantastic news.
“It’s been a combined effort of so many people – both local and from further away – over such a long time. It really is an extraordinary success”.
“Leith Hill has always been a completely inappropriate location for oil drilling, in addition to the overall issue that we should be leaving all fossil fuels in the ground.
“Local campaigners have been fighting Europa’s plans for a decade and we are overjoyed that the Forestry Commission and the Government minister have finally seen sense and put a stop to the horrendous prospect of oil being drilled in such a beautiful and vulnerable environment.
“There will be other battles ahead, oil drilling is still planned for other sites across the Weald, but for now we will be celebrating the fantastic news that there will be no oil drilling at Leith Hill.
“It has cost thousands of pounds to fight this and many hours of effort. Thanks to all who saw sense in the end and stopped this highly damaging plan going ahead.
“Don’t let anyone tell you protests don’t achieve anything”
Keith Taylor, the Green Party MEP for south east England, said in a statement:
“I’m delighted that Europa’s lease hasn’t been renewed. There is no place in our precious Surrey Hills AONB for environment and climate-destructive oil drilling.”
“Don’t let anybody ever tell you protests don’t achieve anything. They do. Residents and campaigners have been fighting drilling plans at Leith Hill for almost a decade; they have frustrated Europa every step of the way. Their dedication is amazing. I have been honoured to support them in their fight. This victory is unmistakably theirs.”
“It is just the latest example of the power of organised and peaceful resistance. It is this power so many oil and gas firms are seeking to crush with increasingly wide-ranging and draconian injunctions.”
“Europa says it’s looking for alternative sites in the area, but deep down I suspect they know the jig is up. That doesn’t mean we won’t be keeping a watchful eye.”
“Death knell for oil exploration in Surrey Hills”
Brenda Pollack, south east campaigner for Friends of the Earth, said:
“This is the culmination of a decade’s planning and legal battle, so it’s excellent news and a significant victory for local people. It has been one of the longest running battles against an oil company in England by residents. The Surrey Hills is just not the place for climate-wrecking oil drilling and it sounds the death-knell for oil exploration here.
“At a time when we know that burning fossil fuels is contributing to a climate crisis the government shouldn’t allow further drilling and carving up our most precious countryside by companies whose main interest is profit.”