map of major oil discovered in sa

Major Oil Discovery in SA

A Brisbane mining company says it has found major shale oil deposits in the South Australian
outback which could be worth an estimated $20 trillion.

Linc Energy have released two independent reports from US based consultants which say between 4
billion and 233 billion barrels of oil are estimated to be trapped in the shale. Linc Energy holds rights
of more than 65,000 square kilometres of land in the Arckaringa Basin surrounding Coober Pedy.

map of major oil discovered in sa

The site of the discovery which could yield up to 233 billion barrels of oil. (Linc Energy)

Linc Energy CEO Peter Bond says if the estimates are correct, it would mean South Australia would hold as much oil as Saudi Arabia and could turn Australia into a self-sufficient fuel producer and oil exporter. He states the potential is massive but even at the lower end of the estimated 3.5 billion barrels, it was still very large.

Mr Bond says Australia consumes just under a million barrels of oil daily but produces less than half or around that amount. To be in a profitable energy export position, at least 500,000 barrels a day would need to be produced which is a very high figure for an oil field to produce.

Mr Bond says the next stage of the project could cost up to $300 million and is seeking not only an investment partner to help fund the project, but a partner who also has the technical expertise to take the project to the next level. To confirm its figures, the company aims to drill up to six horizontal wells but Mr Bond is confident that the region will be home to oil production.

Shale oil is more costly to extract and more controversial than conventional crude oil, and also involves a process called fracking, which is water pumped in to break up the shale. South Australia’s Minister for Mining, Tom Koutsantonis said it was too early to say if the reserve can be profitably tapped. He said there’s a very, very big deposit and a lot more drilling needs to be done, but if the findings are correct, it would certainly be a very significant amount of reserves.

John Young, a senior resources analyst at Wilson HTM, also states that it is too early to fully assess the quality of the resource and how much can be extracted at a commercially competitive cost. He says it would take a significant amount of exploration and appraisal work before the industry would be in a position to determine the quality of the resource and whether it would be economically viable.

The Linc Energy reports from consultants DeGolyer and McNaughton and Gustavson Associates are available on the Australian Securities Exchange website.