London is a world city. It’s huge property market is participated by players from all over the world and you may not be considered a super-wealthy person unless you own something in London. Well, in the near future, perhaps you can fly there for an ‘oil bath’? Haha. Just joking but it has been recently reported that a small British oil producer has found a huge oil reserve in London. In fact this reserve may be up to 100 billion barrels of oil which meant this is a world class oil reserve when developed. Of course, the said company, UK Oil & Gas Investments (UKOG) said that perhaps only a fraction could be recovered.
This find is in an area near Gatwick airport (second largest airport in Britain) and it is a huge significance to Britain because all these while Britain has always been relying on North Sea for oil but the output is declining since the start of the century. Of course, would the company be rushing towards production? Perhaps not yet when we look at the current oil price which is still declining and showing little sign of any recovery to the three digit numbers of just 2 years ago. In fact in some reports, it was said that many of the high cost oil fields in America are producing at a loss and may not be able to keep it up. Of course, this also meant that should majority of all these high cost oil fields shut down, the total production would also reduce and perhaps signalling a slow increase in world oil price.
The development should be a long time to come but if this do happen, it will be positive for London too. After all, the production site would definitely needs more highly skilled professionals and these people are definitely not working in London today. Will it cause huge jump? I think as a property market, London is too huge to be affected by just one oil discovery. The only plus point I think would be this oil production site would also be accompanied by many other secondary accompanying services too and thus, the number of new jobs created should be substantial compared to just the usual organic growth currently. Not so soon, just follow the news for now.
written on 13 Apr 2015
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