About 233 billion barrels of oil has been uncovered in Australia, the finding which worth trillions of dollars, in a discovery that could turn the region into a new Saudi Arabia.
The discovery in central part of the kangaroo country was reported by Linc Energy, an energy company and was based on two consultants’ reports, though it is not yet known how commercially viable it will be to access the oil, Calgary Herald informs.
“Analysis presented in these reports indicates that the Stuart Range formation and the underlying Boorthanna and Pre-Permian formations are rich in oil and gas prone kerogen that may form the basis of a new liquids-rich shale play,” Linc said in a statement to the Australian stock exchange.
According to the reports, the company’s 16 million acres of land in the Arckaringa Basin in the southern part of Australia contain between 133 billion and 233 billion barrels of shale oil trapped in rocks.
However, it looks like only 3.5 billion barrels, worth almost $359 billion at today’s oil price, could be recovered.
Peter Bond, Linc Energy’s chief executive, predicted that the found deposit will definitely affect the world’s oil industry, but adding that it would cost about pounds 200million to enable production in the area.
Shale oil is more costly to extract than conventional crude oil and to uncover it hydraulic fracturing is needed, also known as fracking. This method involves introducing cracks in rock formations by forcing through a mixture of water, sand at chemicals at high pressure.
“If you took the 233 billion [barrels], well, you’re talking Saudi Arabia numbers,” Mr Bond told reporters.
“It is massive. If the Arckaringa plays out the way we hope it will, and the way our independent reports have shown, it’s one of the key prospective territories in the world at the moment.”
He continued: “If you stress test it right down and you only took the very sweetest spots in the absolute known areas and you do nothing else, it is about 3.5 billion [barrels] and that’s sort of worse-case scenario.”
Tom Koutsantonis, mining minister in South Australia state, where the deposit was found, had previously said in an interview that the sheer amount of oil could be enough to see Australia become a self-sufficient net exporter.
“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 $20tn,” said Koutsantonis.
The prime minister of the region also warned that it was not yet known “whether it was economic to recover or not”, with the oil trapped in “low-permeability, clay-rich rocks” that needed to be fractured to release the fuel.
Specialists claim Australia to have reserves of about 3.9 billion barrels of crude oil – about 0.2 per cent of the world’s total – and produces about 180 million barrels a year.
Even at the lowest estimate, the uncovered oil deposit would make Australia a net oil exporter; while at the higher estimate, the county would become one of the world’s biggest oil exporters.