Industry

UKOG unveils Isle of Wight drilling plans

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UKOG’s proposed Arreton well on the Isle of Wight. Source: UKOG diplay panel

UK Oil & Gas revealed details today of two proposed oil exploration sites on the Isle of Wight.

At an information event near Newport, the company said it was preparing to submit planning applications early next year for sites near the villages of Arreton and Godshill. Meeting brochure (pdf)

Both are on privately-owned farmland outside, but close to, the boundary of the Area of Outstanding Natural Beauty (AONB).

UKOG said it would seek permission from Isle of Wight Council to drill and test a vertical and sidetrack well at each site.

The sidetrack wells would target the Portland oil formation at about 3,000ft or 900m. The vertical well would be drilled down to 5,600ft or 1,700m.

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UKOG’s information event on oil drilling plans on the Isle of Wight, 16 December 2019. Photo: DrillOrDrop

Stephen Sanderson, the chief executive of UKOG, said:

“We know oil is there. We will be assessing whether it is there in commercial quantities, whether it is commercially viable.”

He said the sites could each produce 500 barrels of oil per day. This could, he said, be enough to supply 90,000 cars on the island.

If successful, he said, each site could generate £0.5bn during its lifetime.

Opponents of the proposals have said the developments would put at risk the island’s supply of drinking water. They were also concerned the schemes would industrialise the countryside and threaten tourism and the Isle of Wight’s ecological aspirations. Some people said the oil should be left in the ground for climate change reasons.

Site details

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Arreton site (in red). Source: UKOG brochure

UKOG said the Arreton site is about 600m from previous wells last drilled in the 1970s, which identified oil.

The site is north of the Newport-Sandown road (A3056), about 600m from the nearest home. Arreton village is about 1km to the east and Blackwater is 1.6km to the west.  The company proposes to build a new road junction and a vehicle access road as part of the scheme.

The Arreton geology is described by UKOG as a “look-alike” for that at its Horse Hill exploration site in Surrey.

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Godshill site (in red). Source: UKOG brochure

The Godshill site is off the Whitewell Road, 400m from the nearest home. The village of Godshill is 1km to the north and Roud is 600m to the south.

No previous wells have been drilled at Godshill and the company is using seismic surveys carried out in the 1970s. There are no plans to do new seismic testing.

None of the 10 wells drilled on the island are active. DrillODrop asked Mr Sanderson why UKOG expected to be successful when other companies had failed. He said:

“They were looking for another Wytch Farm [the UK’s largest onshore based oilfield] in deeper geology. We are looking in shallower geology.

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Sections through the proposed Arreton well. Source: UKOG display panel

Mr Sanderson said UKOG would “only drill Godshill if Arreton is successful.”

But the brochure and display panels said:

“It is yet to be decided if the two projects are to be treated as individual projects running independently of each other but not necessarily at the same time, or alternatively, as a concentrated cooperative approach with benefits of scale and efficiency in an attempt to minimise disruption during mobilisation on and off the island.”

Response

There were more than 30 visitors at the event during mid-afternoon.

Mr Sanderson said:

“I am pleased they have come and want to find out the facts. People seem very interested in gaining information, which is the object of the exercise.”

One person described the exhibition as “very measured”. Another said:

“This is not about consultation. They are telling us what they want to do. This is just about mitigating local impacts.”

One person complained the company was “evasive” when asked the names of the owners of the land that would be used. Another person said a representative walked away when asked whether the development was appropriate at the time of a climate and ecological crisis.

A woman said she was unhappy that UKOG did not appear to have spoken to local environmental groups, such as the wildlife trust.

A person filming the event was asked to leave and escorted from the room by security staff.

Key issues

Carbon footprint

Isle of Wight Council has declared a climate emergency and approved a motion aspiring to achieve net zero carbon emissions by 2030. It also established a task force to achieve this target.

One visitor to today’s event told DrillOrDrop:

“We should moving away from fossil fuels. We should be cutting down on the amount of plastic that is produced.”

Another said:

“I came here already believing that none of this oil should come out of the ground. There is nothing here to make me change my mind.”

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UKOG display panel on the uses of oil

UKOG’s literature stressed the valuable uses of oil, from pharmaceuticals to the blades on wind turbines.

Mr Sanderson said:

“Current lives are inextricably linked with oil. We have to change but the solution is not to stop everything and reverse back to the early 20th century.”

He said:

“The carbon footprint will be far lower to produce oil at Arreton, 20 miles from the Fawley refinery, than import oil from Saudi Arabia or Texas.”

Fracking

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UKOG display panel for Arreton and Godshill proposed oil wells

UKOG repeated several times that it was not a fracking company and would not use fracking to extract the oil on the Isle of Wight.

It said it would use an acid wash to clean the well. Asked by DrillOrDrop whether it would  inject acid under pressure, Mr Sanderson said this was not necessary:

“The rocks have sufficient fractures to flow. We just need to ensure that we clean the perforations in the well.”

On fracking, one person at the event said:

““I think there is a lot of obfuscation here. They are saying they are not going to frack and they are not going into the shale. But the test well goes right into the shale.

Another person said:

“From past experience I do not trust them.”

Another said:

“What I have seen today does not make me feel any better. It does not make me think it can be done safely.”

Water

About 30% of the island’s water is imported. Frack Free Isle of Wight said the developments would use a lot of water, could threaten the quality of local groundwater and would create a lot of waste.

UKOG has said the drilling operation would be carried out during the winter when the island was self-sufficient in water. It said Arreton and Godshill would be “zero discharge sites”.

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UKOG display panel

Environmental impacts

UKOG has argued that the two applications do not need environmental impact assessments (EIA). Its consultant said:

“We did not identify any impacts that would be significant.”

The company is still waiting to hear from Isle of Wight Council whether the planners agree. The council has promised a response before Christmas.

The company said it had chosen the two sites because they were outside the AONB, which covers a large part of the island.

At Arreton, the view from the nearby ridge would look over the top of the 35m rig, a consultant said, and the drilling rig would be on each site for a maximum of 60 days.

An opponent of the scheme said even the new access road that would be required at the Arreton site would result in industrialisation of the countryside.

Both sites are in the horticultural heartland of the island. The Arreton site is close to a major tomato grower.

Traffic

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The proposed lorry route in dark blue. Source: UKOG display panel

If the sites were approved, oil would be exported by tanker through Godshill, Rookley and past Arreton and Wootton Bridge to the East Cowes lorry terminal. The oil would be processed at a refinery in Hampshire. The same route would be used by construction traffic.

UKOG denied that it would “create HGV chaos”. But some people at the information event raised concerns that tankers and heavy goods vehicles would travel through their villages.

The company has estimated that there would be a maximum of 15 two-way HGVs movements a day for each site during construction, drilling, initial well testing and well workovers. But it also said there would be an average of 2.5 lorry movements a day.

Community benefits

UKOG said it would give a proportion of the revenue from the sites to the local community. The scheme would be voluntary and Mr Sanderson conceded that the company had not devised a scheme. But he said:

“It is right that people benefit from what is produced locally.”

One person said in response:

“We do not want your money. This is a bribe.”

Another said:

“The only real money is going to go to the landowners who allow their fields to be used.”

Finance

Several people at the event questioned how UKOG could fund the drilling on the Isle of Wight because it had no sites yet in full production.

Mr Sanderson said the company aimed to put the Horse Hill site into full production by September 2020 and this would generate cash for other activities. He said:

“When we have established a production facility at Horse Hill, we will also be able to borrow money from debt if we need to, based on the value of the oil in the ground.”

Reporting from this event was made possible by individual donations from DrillOrDrop readers. We will follow the progress of the proposals through the planning system.

 

 

27 replies »

  1. That Portland label is right on the micrite! And the lateral well goes straight thru the micrite layer, aka KL. The other well goes down straight thru all the shale withe it’s little ‘blue’ micrite layers. Who do they think they are fooling?

    • Kathryn

      Looks like they will run the horizontal well along the top of the Portland ( in the conventional reservoir and conventional structure ). Maybe they fancy having a look at the kimmeridge. Maybe looking for naturally a fractured micrite suitable for a test and a bit of acid? However the blurb shown above would indicate that the company is concentrating on rocks capable of good natural flow rather than unconventional reservoirs.

      I expect there will be a few investors who are disappointed that the company has settled down to one targeting conventional Portland Reservoirs and their low reserves and production rates. The heady days of potential back to back drilling in unconventional tight reserves seem a long time ago ( and a share price 700% more than now ). But worth keeping an eye on, and easier now that Angus have an old gas field to keep them busy ( and completely conventional ).

      The pictures also show faulting, which must be a disappointment to those who prefer to believe that they are never shown to the public.

  2. Of course, if they wish to avoid seeing a couple of nodding donkeys, and probably not even them these days, they can look out across the Solent and watch the oil tankers puffing up to Fawley having come from thousands of miles away-and hoping that they avoid a Torrey Canyon style disaster. Now, that would really help tourism!

    Let’s leave the oil in the ground in Texas/Gulf and get our own into play. Makes so much sense that the UN have advised utilisation of local resource against importing from thousands of miles away.

  3. Once again Ruth bends the story like the BBC This is the best thing for the locals and for the country.They don’t frack simple and if they started after stating several times they won’t and don’t would be finished .Too many nimbys and greens frightened of their shadows have you learned nothing from the Labour and greens humiliation .It is going to happen end of !

  4. It just doesn’t make sense! “Enough to fuel 90,000 cars on the Island” – Replace them with electric cars and make the Island pollution-free.

    Where are they planning to refine the extracted oil? It’s all rubbish.

  5. Fawley Refinery. You can actually see it from IOW. The one that is supplying aviation fuel to every airport in the southern part of England-all of which have expansion plans underway-including Southampton Airport. Fawley Refinery, receiving oil from one site in a UK tourist hot spot and another near Stockbridge for many years next to one of the worlds most pristine-and clear-salmon and trout rivers. (Yet, pollution in R.Itchen-from a salad washing factory!!) Fawley Refinery that actually IMPROVES water quality around the IOW.

    Makes sense.

    (By the way, electric cars are not pollution free. Tesla, and others, being sued for their impact upon DRC and child labour mining a carcinogenic material-cobalt. Senseless and immoral. And then, sub sea mining about to start to trash the oceans to harvest such materials. Senseless.)

  6. I say let’s see how they get on with there other sites first, ie how there other site impact the environment, what is put back into local communities, make sure they have the funds to complete everyone’s needs if it fails, jobs for the community and profit for shareholders

  7. Last time I looked, Graham, on a visit to a UKOG site Ruth was posting about butterflies and buzzards. Seems pretty normal to me. I also note that the timeline on IOW is indeed linked to progress at their other site ie. HH.

    Not sure if it has been finalised at HH but I think 6% of revenue was earmarked for local community. Maybe something similar will be offered for IOW. If some don’t want to utilise it, then others would find a use for it. (As long as it doesn’t get diverted to paying for Greens lost deposits or crowd funding protests costs.)

  8. Perhaps Martin, you should stand back from the money benefit argument and actually look at the reality.

    IF UKOG can acutally make a profit instead of losses like those for 2018 to 2019, they may be in a position to brag about community revenues. At only 50005 barrels from last year from Horse Hill (45 minutes supply for the UK ) they cannot hope to raise the kind of revenue to break even, (Even if they get their four new wells and they perform equally) although that might just pay their director and staff saries and bonuses I guess.

    Their business rates will not cover the costs to the council and Island Roads of keeping our already crumbling highways and subsurface infrastructures together with existing additional freight and East Cowes residents are going to be REALLY pleased about increased HGV size and frequency.

    Not forgetting the 230 odd regular passengers who have specific medical needs who have licence to normally remain in their vehicles to travel on any ferry for mainland hospital treatement or work. If the ferry is transporting hazardous materials, these ferries will not be available to them.

    This project will bring nothing to our economy, although a few people will obviously benefit initially.
    And if you are an investor – well….. I should consider shifting a few of your less than worth it penny shares to assets which are less likely to be stranded in a few years time. Norway has decided to cease investment in fossil fuels – that should ring alarm bells.

    • Well, tisme, the reality is not to be found in your post!

      HH is STILL undergoing TESTING.

      Norway is STILL investing massively in fossil fuels. You are either confused with the Sovereign Wealth Fund reducing its exposure, or simply trying to misinform. The Sovereign Wealth Fund decision was very sensible. Over $1 trillion from the proceeds of oil and gas. Further proceeds from oil and gas every year, is it wise to then re-invest those proceeds into more oil and gas? Too many eggs in one basket all okay until the basket falls-or the oil/gas price falls. The Norwegian Sovereign Wealth Fund invests heavily in UK industry as do the equivalents around the Middle East. Not sure UKOG could compete, but every little helps.

      Interesting about ferries. Electric cars contain hazardous materials. Are they to be excluded?

      No, I am not an investor, but I have dabbled in the past-and made a profit, hence my interest. All shares are about when you buy and sell. You also need to check out whether the bells are real, or tinnitus.

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