Linc Energy Oil Rig in South Australia's OutbackWith Australia Day right around the corner, Queensland-based Linc Energy announced a massive shale-oil find in the outback that could put Australia among the top energy producers in the world.
South Australia is sitting on oil potentially worth more than $20 trillion, independent reports claim - enough to turn Australia into a self-sufficient fuel producer.Shares of Linc Energy [ASX- LNC] soared by more than 30% in trading on the Australian Securities Exchange shortly after the find was announced on Thursday- an 18 month high for the company.
Brisbane company Linc Energy yesterday released two reports, based on drilling and seismic exploration, estimating the amount of oil in the as yet untapped Arckaringa Basin surrounding Coober Pedy ranging from 3.5 billion to 233 billion barrels of oil.
At the higher end, this would be "several times bigger than all of the oil in Australia", Linc managing director Peter Bond said.
This has the potential to turn Australia from an oil importer to an oil exporter.
"If it comes in the way the reports are suggesting, it could well and truly bring Australia back to (oil) self-sufficiency," Mr Bond said.
State Mineral Resources Development Minister Tom Koutsantonis said there were exciting times ahead for SA's resources industry.
Mr Bond said there was the potential for a US-style "shale oil" boom in SA.
Shale oil extraction involves using new technologies to drill vertically and then horizontally for distances of more than one kilometre through shale rocks that contain oil.
The process was once prohibitively expensive but advances have created a new oil boom in the US.
Mr Koutsantonis said: "We have seen the hugely positive impact shale projects like Bakken and Eagle Ford have had on the US economy.
"There is still a long way to go, but investment in unconventional liquid projects in South Australia will accelerate as more and more companies such as Linc Energy and Altona prove up their resources."
Mr Bond said the potential in SA was "massive", but even at the lower end of estimates - about 3.5 billion barrels - it was still very large.
The find is centered around the South Australian outback town of Coober Pedy, which was founded as an opal mining town in 1915. Coober Pedy remains an active opal mining town to this day.
Presently, Australia has been drilling for oil onshore at the Cooper Basin- which straddles the South Australia/Queensland border- since oil and natural gas deposits were discovered in 1961. In addition to offshore projects off the northern coast of Western Australia, oil and natural gas production has taken place at the Amadeus Basin in the Northern Territory since the 1980s.
However, the find at Coober Pedy and South Australia's Arckaringa Basin could easily surpass the output from the oilfields located in the Cooper and Amadeus Basins. While some experts cautioned that the actual number of recoverable barrels of oil may be in the neighborhood of 3 or 4 billion barrels, the news was greeted with considerable fanfare in the Australian press- as even the more pessemistic estimates could still help the Australian economy considerably.