We found oil, now it’s your call, guys . . . how do you want to use 100 BILLION BARRELS?
HE’S been labelled Britain’s JR Ewing, but also decried by critics of his City record as a chancer. David Lenigas is the head of a small oil company that made huge waves last week when it claimed there was a sea of crude oil under South East England.
Sceptics have scoffed and have pointed to Lenigas’s mixed reputation in the Square Mile; environmentalists have been outraged; and the residents of Surrey, Sussex and Kent are doubtless a little nervous.
But David Lenigas, who chairs UK Oil & Gas Investments, is unrepentant. ‘If you own a farm or land in the Weald, there’s a pretty good chance there’s a bucket-load of oil under there,’ he declares.
His company has a licence over just a tiny fraction of the Weald basin which stretches from Hampshire to Kent. The vast majority of the oil, which has been put at 100 bil- lion barrels, is in virgin territory and would require a massive investment from the oil groups to exploit.
As far as Lenigas is concerned, he is just the messenger. The decision on whether to tap this resource – and by how much – is one for the people of Britain, he says.
It is perhaps the most diplomatic approach to take for an Australiaborn 53-year-old millionaire who lives in Monaco.
‘I don’t own this oil,’ he says, ‘the people who live there own this oil. I encourage free speech so people can say whatever they think. I say what I like about things and what I don’t like about things. But I’m just sitting here as a guy who does a lot of work in a lot of countries saying to the UK, “Look, this is really your call guys. It’s up to you how you want to use this discovery”.’
Strictly speaking, mineral deposits anywhere in the UK belong to the Crown and the right to extract and sell them is licensed by the Government. And while an oil company would need your permission to put a rig on your land, changes in the law mean they are allowed to drill into deposits under your property from other locations – drills go sideways as much as they go downwards.
Lenigas is a blunt-speaking bear of man who describes himself as ‘just a dumb mining engineer’, and ‘a bush boy’, referring to his upbringing in Western Australia. ‘There were seven people living in the town. When my family left, there were just two.’
But what he means when he says the oil belongs to ‘the people who live there’ is that Britain as a whole will have to decide how to exploit this potential resource.
‘What is one of the key things a country craves? Energy security. We all forget that not long ago Britain was down to one-and-a-half days of gas supply in mid-winter. But you are now looking at an oil basin that is undeniably recognised. So what do you guys want to do about it?
‘I want to stimulate debate on this because if Britain does want to use this, it is not little companies like ours that can do that. This is big-boy territory. This is BG, ExxonMobil, Shell, all those sorts of guys who have got big pockets and the time to wait and negotiate properly.’ It has been estimated that five to 15 per cent of this oil can be reached using conventional methods. That knocks a hole in the headline figure of 100 billion barrels, but would still be a hefty amount. The whole of the North Sea has delivered just 45 billion barrels in 40 years.
The flurry of activity prompted by UK Oil & Gas’s stock market announcement – including a huge jump in its share price – also prompted a deluge of doubters who claimed the oil resource was exaggerated; that extracting the oil would be far harder than thought.
Lenigas’s career has included dozens of company directorships mainly in mining and oil but also a stint heading – he describes it as ‘rescuing’ – the rump of the Lonhro and African airline FastJet, a part- nership between Lonhro and Stelios Haji-Ioannou’s easyJet.
But in that career he has also annoyed a lot of people. In the City he is Marmite: some love him and at least an equal number express distaste. He has been accused of talking up his companies too much.
‘People who don’t like me bought their shares at the wrong price,’ he declares. And to those who say they doubt the current claims for the Weald, he insists that the numbers were established by Nutech, an independent American petroleum research group.
There is also, of course, criticism from environmentalists and last week it was not long before the F-word (for fracking) was being widely used in connection with the Weald claims.
UK Oil & Gas’s exploration site at Horse Hill, near Gatwick, is not far from Balcombe, where fracking firm Cuadrilla has attracted armies of protesters, though it too has not yet carried out any fracking. Lenigas insists his own firm is not interested in fracking and has promised it will not do it.
‘We have no intention of fracking. There are enough holes in the limestone to allow the oil to flow.’ But he does suggest that others might do so and that fracking could increase output. ‘We reckon five to 15 per cent can be got out of the oil in place,’ he said, ‘but we have seen numbers with technology and going to fracking you can get up to 30 to 40 per cent recovery out of some of these things. But I am not interested in doing that.’
Whatever happens, oil wells will not spring up overnight. Even at Horse Hill there is as yet no facility to pump oil in significant volumes and detailed exploration is still underway. Across the rest of the Weald it is likely to take years to establish where and how oil could be extracted and, of course, to get through licensing and planning issues. Even so some residents are sure to be nervous. Lenigas is clear: ‘I understand people might be upset. I’d be a bit piqued myself.’
Although a resident of Monaco, Lenigas does own a farm i n Oxfordshire, though he is reluctant to say exactly where. ‘The protesters will turn up,’ he says.
And if someone wanted to drill for oil at the edge of his property? ‘Obviously, that’s going to p*** me off,’ he says in typically blunt style. ‘But I would say to them just get on with it and do it quickly. That’s life.’
Sceptics might argue that with a home in Monaco, Lenigas is not quite as exposed to oil drilling near his property as others. But he insists the future is what matters. ‘People need to think long term. You’ve got kids,’ says Lenigas.
Lenigas himself has four children ranging from a grown-up lawyer daughter in Australia to a five-yearold by his third and latest wife. ‘Three wives, four kids,’ he muses. Then quips: ‘Four for three… sounds like an England cricket score.’
Now that’s a joke likely to make him really unpopular in Surrey and Sussex.
If you own land in the Weald, there is a good chance there’s a bucket load of oil under it
In the City, he is Marmite – some love him and an equal number express distaste