English village quails at prospect of new oil rush

Fri Aug 21, 2009 12:15pm EDT
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By Catherine Bosley

COLDHARBOUR, England (Reuters) - The affluent English county of Surrey -- with its rolling hills, historic tiled houses and ancient oak woodlands to the south of London -- may not seem the most obvious place to prospect for oil.

But two companies are working together to drill an exploratory well there and say a change in tax law could help to step up exploration elsewhere in British shires.

They face stiff local opposition.

Residents in the village of Coldharbour, which has 250 inhabitants, one pub and no store, are less than keen to have a nodding donkey in view of their homes.

"The oil is over there, under the church in the village," said Stuart McLachlan, standing on a wooded hill and pointing in the direction of Coldharbour's Victorian stone church.

London-listed Europa Oil & Gas and Egdon Resources are seeking approval from Surrey County Council to drill a well on a hill 1.5 km from the village, and tap in horizontally.

Europa's CEO Paul Barrett said drilling an exploratory well costs $2.5 million and lifting costs would be modest at around $10-$20 a barrel.

He insisted the local residents, who need cars to supplement the village's limited public transport, should not fear for their environment.   Continued...

<p>Racegoers watch the third race of the Epsom Derby Festival at Epsom Downs in Surrey, southern England June 6, 2008. REUTERS/Alessia Pierdomenico</p>