History of Oil & Gas in the UK
Britain is a nation with world-class universities, ground-breaking research, high technology start-ups and highly entrepreneurial businesses. In the 19th century, Britain became the world’s first industrialised economy, leading the Industrial Revolution, and as a country we can be rightly proud of our achievements. Nowhere is this truer than in the oil and gas industry.
James Hutton, a Scotsman, is considered to be the founder of the principles of geology. William Knox D’Arcy, born in Newton Abbott, England, discovered oil in the Persian Gulf in 1908 and helped to transform the region. Britain’s influence in the field of geology in general and on the oil and gas industry are still highly important today.
UKOG has begun to write its own history, as we set off to become an oil and gas exploration and production investment company. We are proud to play our part in unlocking Britain’s rich natural resources sector, in innovative ways, based on the values and achievements our sector forefathers established. Below is a short history of Britain’s onshore oil and gas industry.
In the 17th century Sir William Clavell, owner of the land around Kimmeridge, used the Kimmeridge oil shale as fuel for glass-making, and for boiling sea-water to manufacture salt.
In 1848 the Bituminous Shale Company in Dorset built a tramway and worked the Kimmeridge oil shale, utilising a small port to export the un-retorted shale. The oil shale was converted into varnish, grease, pitch, naphtha, dyes, wax, fertiliser and other by- products at nearby Weymouth. In the same year, Wanostrocht and Company used Kimmeridge oil shale to light the streets of Wareham with 130 gas lamps, and later had a contract to light the streets of Paris using gas from burning imported Kimmeridge Clay. By 1890, the Kimmeridge Oil and Carbon Company reported that there were 5000 ft of underground tunnels or levels at Kimmeridge, but in the Late 1890s, oil shale mining came to an end.
Lower Carboniferous oil shales of the Scottish Lothians, west of Edinburgh, mined and heated in retorts to produce mineral oil. These were continuously worked from 1851 to 1962. At their maximum productivity before the First World War, the annual output was over 3 million tons of shale oil. The initial purpose of the industry was to produce lubricating oils and paraffin for heating and lighting,
First discovery and production of onshore gas, in Heathfield, Sussex, England, during construction of Heathfield railway station. The gas was found when water wells were being drilled and went on to power the lights for the station.
The Kimmeridge Bay oilfield was discovered by D’Arcy Petroleum (BP) located above the cliffs of Kimmeridge Bay, an Area of Outstanding Natural Beauty and a heritage coastline. The well is the oldest continuously producing well site in the UK and has been on-stream since 1960, producing around 350 barrels per day from naturally fractured shelly limestones of the Middle Jurassic Cornbrash at about 320m (1050ft) depth. The field provides an interesting possible producing analogue to the potential Kimmeridge limestone play identified by UKOG.
Europe’s largest onshore oil field comes on stream at Wytch Farm, Dorset. It is located in an Area of Outstanding Natural Beauty and today is the largest onshore oilfield in Western Europe. The field has produced almost 500 million barrels of crude oil, safely and without environmental damage to a very sensitive coastal habitat. Peak production topped at over 100,000 barrels of oil per day, or just under 10% of UK daily oil demand. Current production is circa 18,000 barrels per day. The field has utilised conventional stimulation of the sandstone and limestone reservoirs to maintain production rates.
The onshore oil and gas industry in the UK has been in existence for over 150 years. Before the First World War, the UK imported almost all its oil and gas. During both World Wars the need for Britain to produce its own oil to help the war effort became an urgent priority for the UK Government and legislation was introduced to enable companies to explore for hydrocarbons more readily.
Onshore oil and gas activity started to accelerate again after the 1979 second oil crisis, in the wake of the Iranian Revolution. As oil prices rose sharply, domestic production became increasingly important.
In the UK there are now 120 onshore oil and gas sites with 250 operating wells producing between 20,000 and 25,000 barrels of oil equivalent a day.
UKOG is operating primarily in the Weald Basin, in South East England, which has a long tradition of oil and gas exploration. There are 13 producing sites in the Weald, some almost 30 years old. As described above, hydrocarbons were first produced in the Weald in the 19th century. The oil and gas industry in the UK produced 1.4 million barrels of oil equivalent per day in 2014, offshore and onshore, of which 59% was oil/liquids.
In 2013 the UK consumed 1.5 million barrels per day of oil and 2.7 tcf of gas, making it now a significant importer of hydrocarbons, having been a significant exporter in the 1980s and 1990s.
In 2014 the oil and gas industry, offshore and onshore, spent £1.1 billion in exploration, £14.8 billion in capital investment and £9.6 billion in operating costs.
Further information on the UK’s oil and gas industry can be found here