South Australia 'sitting on oil worth $20 trillion'

[Peter_Tersteeg]

It's been well documented for decades that there's oil under various parts of Australia. Most of the natural gas we currently extract is sitting on top of some form of oil.

The issue at the moment as I understand is that the oil is currently too difficult to extract for it to be economically viable to extract it, so for the moment it stays were it is.

There's still lots of oil under Texas, but for the last few decades it's been easier to get the oil from the Middle East. There's been a few comentries in the last year that the US will be almost completely self sufficient on oil within a decade, because they're again approaching the point where it's cheaper to get the local stuff as Middle East oil starts to run dry.

 

[Peter 14.7]

that should pay for some decent infrastruture in sydney

Ouch, touchy we are, Peter

PS Go Swannies

 

[Peter 14.7]

so will fuel prices go down if we have our own oil?

No, world demand dictates price not location.

As I understand it we base our price on overseas mark, from Singapore Crude.

It is so we pay real value not local value and hence why not, if I owned an oil field and I could sell locally for $50 a barrel or to overseas buyer for $80 a barrel it is a no brainer.

Peter

 

[Dazz]

It's been well documented for decades that there's oil under various parts of Australia.

It's not well documented at all. The amount of exploration data is tissue thin when it comes to outback Australia and any of our offshore leases other than the NW Shelf and Bass Strait.

Technically you are correct, I'm sure there is oil under various parts....but whether it is in sufficient quantity to make it economically viable is another step altogether.

Most of the natural gas we currently extract is sitting on top of some form of oil.

Ummm...no. If they are both there in the same reservoir, the crude is targeted first, not the gas.

The issue at the moment as I understand is that the oil is currently too difficult to extract for it to be economically viable to extract it, so for the moment it stays were it is.

Ummm...no. Difficulty isn't the problem. Size of confirmed reservoir and it's saturation are always the problem. We've been able to extract it from difficult spots for decades now.

There's still lots of oil under Texas, but for the last few decades it's been easier to get the oil from the Middle East.

Depends on your definition of lots. We're talking about the biggest and most strategic business in the world - by far. The money is enormous - beyond imagination - but other things trump it like strategic military importance.

There's been a few comentries (sic) in the last year that the US will be almost completely self sufficient on oil within a decade

Don't count on that....at a consumption rate nearing 24 MMbbls / day, they ain't gonna stand on their own two feet just yet.

...because they're again approaching the point where it's cheaper to get the local stuff

Umm, no they are not...

as Middle East oil starts to run dry.

Umm, no it's not.

Having spent 4 years at Uni studying this industry and 20 years working in it all over the world, I barely scratched the surface. Trying to explain to a layperson how this industry ticks, when the only contact they have with the industry is filling up at the bowser once a week and perhaps hearing about some tiny little speculative Aussie stock making it big.....best to just chuck it in the "too hard basket" like most previous Govts have done.

It's so much bigger than little old Australia or any Govt body most people cannot get their head around it.

 

[Dazz]

world demand dictates price not location.

Exactly - the industry is too large to recognise national borders.

if I owned an oil field and I could sell locally for $50 a barrel or to overseas buyer for $80 a barrel it is a no brainer.

Exactly - just because an oilfield is next to you doesn't give you a right to buy it cheaper than the man half way round the world. A floating tanker will typically be bought and sold up to 20 or 30 times in New York on it's way to a refinery somewhere in the world.

It knows no boundaries or borders.

 

[Buzz]

Dazz thanks for sharing your thoughts. It is easy to get carried away with headlines and not know the true story. That is why I stay away from shares, I just don't have time to do the research and uncover the true story.

Back in my previous life as a mining engineer I remember attending a minerals council talk in Sydney with the SA Minister for Mining. Seriously the uranium deposits under SA are enviable around the world, but back then the 3 mine restriction and the Woomera prohibited area restrictions didnot make access easy. Now this report of oil in SA is, on the surface, exciting. The truth is (like Dazz) having studied and applied this stuff myself, I know initial indications on unproven resources is a long way from getting to a proven viable resource. The ability to be able to extract them viably and then transport them economically to the next stage is a long drawn out process and many years away.

Having said that speculation is fun, I know I wish I took a geologists advice in 2000 and bought shares in a mine in the Congo at 2c as they jumped to over a $1 (before dropping spectacularly) but I know presented with the same opportunity again I probably wouldn't.

Jane Slack-Smith

 

[JT7]

Having said that speculation is fun, I know I wish I took a geologists advice in 2000 and bought shares in a mine in the Congo at 2c as they jumped to over a $1 (before dropping spectacularly) but I know presented with the same opportunity again I probably wouldn't.

Jane Slack-Smith

The benefit of hindsight is a wonderful thing.......

Wouldn't of minded picking up several properties in the Pilbara or Moranbah around the turn of the last decade

 

[evan1875]

Exactly - the industry is too large to recognise national borders.




It knows no boundaries or borders.

Hugo Chavez?

 

[LoneWolf]

Everyone for their own.
SA, a go go zone, or no go zone for IP's?

What you guys reckon?

 

[jim1964]

SA, a go go zone, or no go zone for IP's?

I only invest in South Australia for a number of reasons.Works for me.

 

[Jake Milne]

Everyone for their own.
SA, a go go zone, or no go zone for IP's?

What you guys reckon?

I wonder what Margaret Lomas would say about this ^

 

[Ajax]

I liked the following letter to the editor in Fin Review a few day's ago in relation to Linc Energy's announcement.

I have already watched the hype evaporate from Buru Energy with its large conventional and unconventional oil and gas targets (in the Kimberley) and suspect that LNC's share price (with uncoventional shale gas targets in the Arckaringa Basin in S.A.) will whither:-

Caveat Emptor is the missing Linc

...

"Unrisked prospective resources for unconventional reservoirs in the Arckaringa Basin have been estimated by [independent consultant] Gustavson Associates to be 233 billion barrels of oil equivalent". Suggesting a company has potentially 20 per cent of total proven reserves of the world's top 17 producing countries was surely likely to attract the market's attention?

Yet, as Linc's consultant's noted: 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.

Perhaps it's time for the ringmaster ASIC to review patron safety regulations in the unconventional circus? Otherwise expect more punters to get gored by an unrisked bovine"

 

[JT7]

I wonder what Margaret Lomas would say about this ^

Lol I think she's sponsored as a ambassador by the SA government......

 

[JT7]

Lol I think she's sponsored as a ambassador by the SA government......

Not really...but the she's very bullish on Adelaide...due to the heavy exposure of her portfolio to the SA market.....

Not to say its a bad market mind you...I've got one their myself.

Jack