(Deletes reference to Conservative Party in paragraph 11)

LONDON, April 9 (Reuters) - There could be up to 100 billion barrels of oil onshore beneath southern England, the chief executive of a small exploration firm told the BBC in an interview on Thursday. To which the correct response is “yes, but”.

Based on an analysis of samples from a single well drilled near London’s Gatwick airport, UK Oil and Gas Investments estimates there could be 158 million barrels per square mile in the local area.

Horse Hill, where the well was drilled, is part of the Weald Basin, which stretches across large parts of the counties of Dorset, Hampshire, West and East Sussex, and Surrey, as well as parts of neighbouring Wiltshire and Kent.

Scaled up across the whole of the basin, there could be 50-100 billion barrels of oil, though only 3-15 percent might be technically recoverable, the firm admitted (“Oil discovery near Gatwick airport significant” April 9).

“We think we’ve found a very significant discovery here, probably the largest (onshore) in the last 30 years, and we think it has national significance,” the company’s chief executive said in the BBC interview.

The company described the Weald Basin discovery as “a potentially strategic asset for the UK” and went on to say “the key thing about this discovery is about what Britain and the British government want to do about this strategic asset”.

Onshore oil and gas production touches a raw nerve in Britain, where it pits exploration firms against environmental groups worried about climate change and the industrialisation of the landscape.

It also plays into the country’s north/south political divisions, and even exposes internal tensions between the Conservative Party’s pro-business wing and its supporters in rural southern England.

The idea that an exploration company had “found” up to 100 billion barrels below the rolling chalk landscape of southern England has propelled the story to the top of the daily news agenda.

It immediately raises the prospect of thousands of wells being drilled across the landscape of some of the wealthiest parts of the country.

“England’s green and pleasant land” was immortalised by William Blake in his poem “Jerusalem” which is an unofficial anthem for England.

“It’s one thing to have fracking in the vast plains of America,” one Conservative Member of Parliament complained to the Financial Times in 2013. “It’s a whole different matter when people will see gas production in the rolling hills of Surrey.”

But the problems with the Gatwick oil well story should be obvious and they offer a cautionary tale about the difficulty of estimating oil resources and writing about them.

ONSHORE OIL FIELDS

There is nothing new in the idea substantial amounts of oil and gas are buried across Britain. There are three large oil and gas-rich sedimentary basins across southern England, northeastern England, and the central belt of Scotland.

Substantial volumes of oil and gas have been produced in all three areas for well over a century. In Victorian times, shales on England’s south coast were mined as one of the country’s first sources of oil. In Scotland and northern England, oil-bearing shales were used to produce manufactured town gas for early street lighting.

More than 2,000 wells have been drilled onshore since 1902, according to the Department of Energy and Climate Change.

Britain’s onshore fields have collectively produced more than 500 million barrels of oil, though that compares with more than 45 billion barrels recovered from the North Sea.

During World War Two, a specially recruited team of Oklahoma roughnecks drilled more than 100 oil wells in Sherwood Forest (famous as the setting for Robin Hood).

Billeted at Kelham monastery near Newark in Nottinghamshire, the drillers developed an oilfield which eventually produced 3,000 barrels per day. By the end of the war, the field has produced 3.5 million barrels of oil (“The Secret of Sherwood Forest: Oil Production in England during World War II” 1973).

The biggest onshore field, at Wytch Farm in the Weald Basin, is also the largest in western Europe. Discovered in 1979, it had estimated recoverable reserves of almost half a billion barrels and production peaked at around 100,000 barrels per day in 1996.

A string of other small fields, containing hundreds of millions of barrels of oil between them, stretch across the Weald Basin and have been discreetly producing for the last 30 years (“Fracking beneath southern England’s rolling hills” June 2013).

As of February 2014, 117 exploration, 31 appraisal and 100 development wells had been drilled in the Weald area, and of these, 26 were classified as discoveries or at least indicated the presence of petroleum. Thirteen fields were in production plus a gas well which lights a local rail station, according to the British Geological Survey (BGS).

RESOURCES AND RESERVES

There is no question that there are billions of barrels of oil beneath southern England, but how much could be technically or profitably produced remains extremely uncertain.

In 2014, the BGS, under contract from the Department of Energy Climate Change, produced a detailed resource estimate which put the total amount of oil in place at between 2 and 9 billion barrels (“Jurassic shales of the Weald Basin: geology and shale oil and shale gas resource estimation” 2014).

The BGS examined all the available data, which is sparse, on formation thickness, burial depth, thermal maturity, total organic content, clay content, porosity and other factors used to produce resource estimates. It was sceptical about how much free oil the basin contained and whether it could be made to flow to the wells.

UK Oil and Gas Investments is much more optimistic, and puts the oil originally in place at 158 million barrels per square mile near Gatwick and by extrapolation at 50-100 billion barrels basin wide.

But this is based on an analysis of rock samples from a single location which is unlikely to be representative of the entire basin. The company has not yet conducted a flow test to see if the oil can be produced.

To firm up the resource estimates, dozens of wells would need to be drilled across the basin area. They would need to be put into production to turn resource estimates into estimates of reserves that are technically and economically recoverable.

UK Oil and Gas Investments is entitled to be excited by its core samples, and its share price rose more than 200 percent on the news, from less than 2 pence to more than 4 pence per share (less than 2 cents to 6.7 cents).

But rock samples from a single hole do not provide any meaningful information about oil resources (let alone producible reserves) across an area of almost 11,000 square km in southern England.

There may well be large volumes of oil and gas trapped beneath southern and northern England and eventually some of it may be produced, if local and political opposition can be overcome.

There are no good practical reasons why oil and gas should not be produced in England.

But shale oil and gas production in Britain would need to compete for investment with much better understood and probably less costly fields in the United States and elsewhere.

With oil prices currently at $50 per barrel, and the world market awash in surplus oil, the Weald is not top of anyone’s list of investment locations.

The fact this story has received any attention says less about the prospect for oil production than the non-existent understanding of petroleum production among politicians, journalists and the public, and the country’s neurosis about the potential for fracking across England’s green and pleasant land. (Edited by David Evans)