Major oil discovery in outback SA
ABC Updated January 24, 2013, 12:46 pm
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Oil explorations in the Arckaringa Basin in South Australia s far north.
ABC © Enlarge photo
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Brisbane company Linc Energy says independent studies have confirmed a major shale oil source in the Arckaringa Basin in South Australia’s far north.
The company says US-consultants have carried out drilling and geological and seismic surveys around Coober Pedy.
Linc Energy holds rights over more than 65,000 square kilometres of land in the area and started explorations in 2008.
In a statement to the Stock Exchange, the company said reports from US-based consultants indicate underlying rock formations “are rich in oil and gas prone kerogen.”
The company says up to 233 million barrels of oil are estimated to be trapped in the shale.
Chief executive Peter Bond says even if the amount of retrievable oil is well below that, the discovery is still “bigger than the Cooper Basin and Bass Strait combined”.
“Even if you stress test it down to only the very best spots in the very best locations with the very highest possibilities, you’re still talking something in the range of 3.5 plus billion barrels,” he said.
“We’ve also spent a lot of time with our own geologists and external geologists trying to unlock what’s the best option there.
“What it could do is really turn this thing into the next boom so where you saw coal-bed methane transform Queensland and the gas industry, shale could and I think will transform South Australia and a potential oil boom.”
But Mr Bond says it could cost up to $300 million to prepare the site for production.
“We’ve got something in excess of a billion dollar market cap… but the issue here isn’t just capital. It’s the expertise to unlock the acreage as well,” he said.
“We will seek a partner to both fund that and work with us from a technical perspective and that could be anybody.
“It could be a major oil company, it could be one of the major operators in shale, it could be one of the larger overseas oil groups.”
Mr Bond says the discovery has the potential to bolster the nation’s energy security.
“We are importing more and more oil every day. Australia was relatively self-sufficient in oil in 2000, 2001 but since then we’ve been falling off the peak oil curve for quite a while now,” he said.
“Australia currently consumes just under a million barrels of oil a day of which we are probably producing something less than half that or around half that depending on the numbers you read.
“You’d have to get up over half a million barrels a day to put yourself into a net energy export position which would be significant.
“Any oil field that can do half a million barrels a day is massive in anyone’s books.
“It would be a push to get to that high. That would basically be getting out to full production. It’s hit all the runs and done all the right things to get up to that size but if it does, you potentially would be getting up around being an oil exporter.
“By then much of your other oil production in Australia would have dropped off even more and you’ll be just starting to fill the gaps there.”
‘Remote and deep’
Shale oil is costlier to extract and more controversial than conventional crude and involves ‘fracking’ in which water is pumped in to break up the shale.
South Australian Mining Minister Tom Koutsantonis says it is much to early to say if the reserve can be profitably tapped.
“What they think they’ve found, or they have found but whether it’s economic to recover or not is still the question, is vast reserves of shale oil,” he said.
“It’s basically oil which is trapped in low-permeability, clay-rich rocks so it’s within the rocks and you fracture-stimulate those rocks to release the oil.
“There are processes now where you can unconventionally retrieve these reserves.
“If the reserves and the pressure was right over millions of years and the rocks have done the things they think they’ve done they think they can extract vast reserves of oil out of South Australia which would have a value of about $20 trillion.
“South Australia is blessed with abundant resources but there are a few setbacks and those setbacks are that they’re remote and they’re deep.”
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