Shale Oil Bonanza Reaches Australia With '$20 Trillion' Discovery

A Brisbane-based company, Linc Energy, today released two reports that suggest huge figures in potential shale oil reserves located in South Australia, the Herald Sun reports.

The estimates of oil reserves in the Arckaringa Basin range from 3.5 billion to 233 billion barrels of oil — potentially worth as much as $20 trillion.

"If it comes in the way the reports are suggesting, it could well and truly bring Australia back to (oil) self-sufficiency," Linc managing director Peter Bond said.

The announcement seems to be an attempt to emulate a US style shale bonanza, but the feasibility of the claims still need to be proved. Paul Jensz, an analyst for PhillipCapital, told the Wall Street Journal that while South Australia is starved of fuels, Linc would need to prove the quality and economic viability of the resource.

Linc owns the Arckaringa Basin completely, and shares in the company jumped 10% to A$2.17 this morning, the Sydney Morning Herald reported. The company has retained Barclays Bank to advise on the introduction of an experienced shale operator.

UPDATE: Linc has been distancing itself today from the $20 trillion figure, suggesting that the figure was calculated by members of the Australian media rather than industry figures.

‘‘Obviously if you want to stand up there and come up with $US100 times 100 billion barrels, you’ll come up with a big number," Peter Bond told the Sydney Morning Herald. "That’s not how you value oil resources anyway.’’