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Trillions of dollars worth of oil found in Australian outback
Up to 233 billion barrels of oil has been discovered in the Australian outback that could be worth trillions of dollars, in a find that could turn the region into a new Saudi Arabia
Telegraph. By Jonathan Pearlman, Sydney2:30PM GMT 24 Jan 2012
The discovery in central Australia was reported by Linc Energy to the stock exchange and was based on two consultants reports, though it is not yet known how commercially viable it will be to access the oil.
The reports estimated the company’s 16 million acres of land in the Arckaringa Basin in South Australia contain between 133 billion and 233 billion barrels of shale oil trapped in the region’s rocks.
It is likely however that just 3.5 billion barrels, worth almost $359 billion (£227 billion) at today’s oil price, will be able to be recovered.
The find was likened to the Bakken and Eagle Ford shale oil projects in the US, which have resulted in massive outflows and have led to predictions that the US could overtake Saudi Arabia as the world’s largest oil producer as soon as this year.
Peter Bond, Linc Energy’s chief executive, said the find could transform the world’s oil industry but noted that it would cost about £200 million to enable production in the area.
Shale oil is more costly to extract than conventional crude oil and involves the controversial process of hydraulic fracturing, commonly known as fracking.
This 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, well, you’re talking Saudi Arabia numbers,” Mr Bond told ABC News.
“It is massive, it is just huge 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.
"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.”
it is not yet known how commercially viable it will be to access the oil.
In laypersons terms, in order of certainty it goes something like this:
1. Production (we’re pretty sure how much we’ve used to date)
2. Reserves (we’re pretty sure how much is in the ground and readily accessible / recoverable / marketable)
3. Contingent resources (stuff we’re pretty sure is there, and we could technically get access to it, but it’s not currently commercially viable to do so)
4. Prospective resources (stuff we think might be there, and might be technically recoverable)
Reality check for Linc '$20 trillion' find
BusinessDay.au, January 25, 2013
INVESTORS continue to push up Linc Energy stock despite widespread scepticism about reports it has found $20 trillion worth of oil in South Australia's Arckaringa Basin.
Linc shares surged again yesterday ...
[...]
Media outlets, including News Ltd's Adelaide Advertiser, appear to have multiplied the resource estimate by the prevailing oil price to arrive at the exorbitant sum.
Advertisement But Linc chief executive Peter Bond told BusinessDay: ''That's not our valuation. I don't know who did that but someone's got a calculator out and come up with that number … but we wouldn't put a valuation on it at this stage.
''Obviously if you want to stand up there and come up with $100 times 100 billion barrels, you'll come up with a big number. That's not how you value oil resources anyway.''
Petroleum resources are classified into booked reserves - proven, probable and possible - or resources which may be contingent or prospective.
The estimates released by Linc on Wednesday were classified by the consultants as unrisked prospective resources because of their ''lack of commerciality or sufficient drilling''.
As the consultants wrote: ''There is no certainty that any portion of the prospective resources estimated herein will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.''
[...]
http://www.businessday.com.au/business/ ... 2d9mj.html
Court Overturns E.P.A.’s Biofuels Mandate
WASHINGTON — A federal appeals court threw out a federal rule on renewable fuels on Friday, saying that a quota set by the Environmental Protection Agency for incorporating liquids made from woody crops and wastes into car and truck fuels was based on wishful thinking rather than realistic estimates of what could be achieved.
The ruling by the United States Court of Appeals for the District of Columbia involved a case brought by the American Petroleum Institute, whose members were bound by the 2012 cellulosic biofuels quota being challenged.
But production of the “cellulosic” fuel, made from woody material, has been slow to start up, making it virtually impossible to come by. That has presented the refiners, the ones required to buy the cellulosic fuel, with a quandary.
From 2010 through 2012, the E.P.A. has required gradually higher levels of cellulosic fuel to be incorporated into motor fuel each year, for a total of 20 million gallons to date.
But actual production has been near zero. ..
Oil prices are climbing on fears that the Ukraine-Russia crisis will disrupt supplies across the world.
The price of Brent crude, an international benchmark, reached a seven-year high of $97.76 (£72) a barrel on Tuesday.
[...] Maike Currie, an investment director at Fidelity International, said oil could go above $100 per barrel due to a combination of the Ukraine crisis, a cold winter in the US, and a lack of investment in oil and gas supplies around the world.
https://www.bbc.com/news/business-60473233
If it's true that there's been a lack of investment, then that indicates reduced expectations of profit from fresh drilling.
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