Queensland Gives Green Light to Shale Oil Project
By David Winning
Australia’s Queensland state said Wednesday that it would allow companies to develop oil deposits trapped in shale rock formations, aiming to tap reserves estimated at more than 20 billion barrels.
Andrew Cripps, Queensland’s natural resources and mines minister, gave the green light to existing shale-oil operator QER Ltd. to move ahead with plans for a commercial operation near Gladstone.
Amid the buzz around Australia’s vast offshore gas fields and unconventional resources such as coal seam gas and shale gas, the country’s potential to grow its oil output has been largely overlooked. Australia’s oil production last year fell by 14.5% to 484,000 barrels a day—its lowest level since 1983—as conventional fields became depleted, according to BP PLC. BP.LN -1.40%
But international oil companies have been planting flags in parts of central Australia where the geology is similar to the Eagle Ford and Horn River regions of the U.S., which have become major production areas for tight oil. They also like the large tracts of land held there by a small number of companies like Central Petroleum Ltd. CTP.AU +4.00% and Canada’s PetroFrontier Corp. PFC.V -1.52%
Tight oil can be freed from shale rock formations with hydraulic fracturing, or “fracking,” technology. Production in these tight oil fields can be boosted quickly when enough capital is invested—a perfect fit for big oil companies with deep pockets and a mandate to extract more oil.
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