South Australia is reportedly sitting on oil potentially worth more than $20 trillion that’s enough to turn Australia into a self-sufficient fuel producer.
According to reports released by Brisbane company Linc Energy, new oil extraction technology could help unearth anywhere between 3.5 billion to 233 billion barrels of oil in the as yet untapped Arckaringa Basin surrounding Coober Pedy.
Linc managing director Peter Bond said that at the higher end, this would be "several times bigger than all of the oil in Australia".
Related: One billion barrels of oil found
This discovery, if validated, has the potential to turn Australia from
an oil importer to an oil exporter with a US-style "shale oil" boom in
"If it comes in the way the reports are suggesting, it could well and truly bring Australia back to (oil) self-sufficiency," Mr Bond was quoted by News Ltd as saying.
Shale oil extraction involves using technologies to drill both vertically and horizontally for over 1 km through shale rocks that contain oil.
Linc has recently appointed Barclays to advise it an investment partner for the partial sale of the Arckaringa tract. Lincs it acquired over four years ago for around $100 million.
Linc has a market value of $1.1 billion.
The oil boom
A forecast done in November 2012 by the International Energy Agency (IEA) found that the United States would become the world's biggest oil producer by 2017 thanks to an explosion in hard-to-reach energy trapped in shale, or sedimentary rock, has triggered debate among companies and consumers.
According to the IEA, which represents major oil consuming nations, world gas demand is set to rocket by 50 percent by 2035, with half of this increase met by unconventional gas output mainly in the US, Australia and China.
The IEA added that world oil demand should increase by 10 percent over the next 23 years on higher transport usage and result in crude prices rising to only $125 a barrel compared with $107 on average at the moment.
Shale oil and gas "will have the power, not only to stop prices from rising any further, but to send prices lower in the coming years," said DNB Bank analyst Torbjorn Kjus.
"This is despite our view that geopolitical risk in the oil market will be even higher in the coming ten years than in the prior ten years."
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