Biggest oil and gas find for 40 years – and it’s in Yorkshire
BRITAIN’S dwindling energy reserves have received a major boost with the biggest onshore oil and gas discovery for more than 40 years.
Rathlin Energy last week announced that its giant prospect near the village of West Newton in East Yorkshire – 25 miles from York – could be ‘one of the largest onshore discoveries in the UK’.
It upgraded its potential reserves to up to 283million barrels of oil and 266billion cubic feet of gas.
Based on industry analysis, Rathlin could recover at least 59million barrels of oil and 160billion cubic feet of gas, worth a combined £840million.
It is the largest onshore discovery since British Gas struck oil at Wytch Farm near Bournemouth, Dorset, in 1973, when 570million barrels of oil were found. Wytch Farm, operated by Anglo-French giant Perenco, is Europe’s largest onshore oilfield.
Energy analyst Lucy King, of
Wood Mackenzie, said that while onshore energy production is a minor part of the UK’s overall supply, domestic projects such as the West Newton field could help to plug the production gap as North Sea reserves diminish.
Over the year to date, the UK has used a daily average of 1.5million barrels of oil and 7.7billion cubic feet of gas. But UK exploration activity last year fell to its lowest level since the 1960s and 50 North Sea oil and gas fields could cease production within five years.
King, who described Rathlin’s discovery as ‘significant for the UK’, said: ‘From 2021 we estimate that both oil and gas production will rapidly decline. Projects such as West Newton could certainly slow this decline.’
Rathlin Energy is valued at £32.2 million after AIM-listed investment firm Reabold Resources paid about £19million for a 59 per cent stake. Reabold increased its stake from 37 per cent in October after a test well was encouraging.
The remainder of Rathlin Energy is owned by Canadian firm Connaught Oil & Gas and a number of wealthy individuals.
Production at West Newton could start late next year after two further wells are drilled. Union Jack Oil and Humber Oil & Gas both own minority shares in the licence.
Sachin Oza, chief executive of Reabold, said: ‘We remain extremely excited by the potential of what is emerging as a large scale, conventional onshore oil and gas asset.’
King added: ‘With the field being onshore, this greatly reduces the cost of any development, boosting the economics substantially. The discovery is located 25 miles northwest of the Easington Terminal – one of six main gas terminals in the UK – and could easily tie back to existing infrastructure.’