Australian Shale Explorers Prefer Oil to Gas
The huge growth in the U.S.’ shale gas industry has encouraged Australian counterparts to develop its own shale resources; but instead of zeroing in on gas, Australians choose to focus on and invest in oil exploration and development.
The reasons are quite clear. Australia’s gas consumption isn’t that significant, so setting up of additional costly pipeline systems and gas freezing facilities may not be feasible.
On the other hand, existing railway systems and seaports offer ready transport for oil. Thus, oil exploration and development is viewed as a more lucrative endeavor, both in the short and medium term.
The country’s oil productions stats reveal that local supply has dwindled for the past many years. Therefore, boosting oil exploration and, hopefully, making a turnaround could be the more logical path to take.
Based on statistics covering global energy supplies, Australia’s oil production from 2001 to 2011 has slipped by more than 30 percent to merely 484,000 bpd. Currently, it is a net oil importer, with outputs just comprising 5 percent of global oil output.
In the U.S., gas prices have plunged, largely due to the enormous growth in shale gas production. Australia has no reason to duplicate the U.S.’ growth model given that the country is already secure in terms of its gas reserves (from coal and traditional sources). In fact, it projects that, by 2020, it will position itself as the largest exporter of liquefied natural gas (LNG).
According to an Australian energy firm that produces fuel from coal, the country’s shale resources could match oil outputs from U.S.’ Bakken shale formation.
According to the firm’s director, extracting oil, transporting it, and then selling it at a crude oil price per barrel of a comfortable level, say $100 plus, is almost effortless. Transporting it is inexpensive, all it takes is $6 per barrel or cheaper and oil will reach a port via existing train networks.
The country’s potential as a major player in shale gas or oil production remains to be seen. Its energy sector estimates that it needs a good 10 years to be able to go big time in terms of global production standards. However, it remains positive that, eventually, it will reach such status, citing the shale oil deposits it holds which, according to local experts, will rival that of Saudi Arabia’s oil deposits.