Media journal Essay Example

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Unconventional Oil 4

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http://thediplomat.com/pacific-money/2013/02/01/australia-asias-saudi-arabia/

Article: Australia: The new Saudi Arabia?

This article outlines the potential that Australia bears in exploration of unconventional oil in the shale category which is a new global trend on oil exploration. It is estimated that Coober Pedy, South Australia has the capacity to produce 3.5-233 billion barrels of oil worth more than 20 trillion dollars. The capacity has been confirmed by Gustavson and DeGoyler and MacNaughton oil consultants (Linc makes ‘massive’ shale oil discovery, 2013). Saudi Arabia, currently one of the main oil producers has an estimated 263 billion barrels of oil. Therefore, in comparison, Australia has the potential to not only sustain its own oil demands but also export which could be a major revenue generating activity for the government as well as an economic booster.

Shale oil resources can be classified on commercial recoverability basis and the enrichment degree (Shuangfang et al., 2012). The enrichment depends on the abundance of resources pyrolised hydrocarbon and chloroform bitumen A. The more abundant the resources the more saturated oil there is and the higher the commercial recoverability. This is known as enriched resources. The scarce the resources are the less saturated the oil deposits are and it becomes very expensive to mine such oil. This is known as ineffective resources. The production effectiveness however depends on several other factors such as shale permeability degree, shale thickness, shale burial depth and surface conditions such as the source of water, traffic and topographic height (Shuangfang et al., 2012). The degree of clay to other minerals needs to be lower preferably less than 50% to allow horizontal drilling. On the Coober Pedy site, the shale oil deposits lie between one to two kilometres underground. In the US, burial depth of commercially viable shale wells is about three kilometres therefore the Coober Pedy wells are suitable for exploration.

Furthermore, there has been advancement in mining technology in the recent years following the success of shale oil exploration in the US hence reducing exploration costs by a large margin. New technologies allow vertical drilling and then horizontal drilling for over one kilometre in oil rich shale rocks. Also, traditionally Shale oil was mined through crushing of the rock and then heating the organic matter inside it to create liquid oil. New technology such as fracking used in the US is cheaper than the traditional method however a senior gas and oil analyst said that the Coober Pedy basin has the potential to use either conventional or unconventional means.

Linc Energy has already spent billions in exploration so far and they estimate spending a further $300 million for further exploration. They are therefore looking for potential investors through Barclays bank. This confirms that shale exploration is expensive but by the amount of estimated barrels of oil that the site has, Australia is set to have the next shale oil boom after US. In addition, shale oil has also been discovered in Central Queensland with a potential to produce 1 million barrels per day (Schmidt, 2003).

References

Linc makes ‘massive’ shale oil discovery. (2013, March). TCE: The Chemical Engineer, 14.

Schmdt, S.J. (2003). New directionsfor shale oil: Path to a secure new oil supply well into this

century. Oil Shale, 20(3), 333-346.

Shuangfang, L., Wenbiao, H., Fangwen, C., Jijun, L., Min, W., Haitao, X., Weiming, W.,

Xiyuan, C. (2012). Classification and evaluation criteria of shale oil and gas resources: Discussion and application. Petroleum Exploration and Development, 39(2), 268-276.