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Australia Shale Oil Discovery Continues the Country's "Lucky" Streak

Investors are well aware of the shale oil revolution in the United States. But the "revolution" does not end here; it is spreading globally to countries as diverse as China and Poland.

There is one country in particular though that may experience circumstances similar to the United States, if not greater.

I'm talking about Australia, which has often been called "The Lucky Country." That description was first penned in 1964 by Donald Horne and he actually meant it negatively at the time.

But in recent decades, the term has been given a positive spin thanks to Australia's abundance of natural resources and its geographical location near the world's biggest consumer of commodities – China.

And Australia may have struck luck again thanks to the recent announcement of a massive shale oil discovery.

Australia Oil and Gas Discoveries

Australia has already been in the forefront of new oil and gas production, used to feed the hungry Chinese dragon next door.

The country is scheduled to, within several years, surpass Qatar as the world's largest exporter of liquefied natural gas (LNG). That is largely thanks to massive quantities of natural gas found off its northwest shores in the Browse Basin and elsewhere.

Royal Dutch Shell (NYSE ADR: RDS.A) has actually ordered the building of a $10 billion vessel to be used as a Floating Liquefied Natural Gas (FLNG) terminal. The vessel is intended to spend most of its time above Prelude, a natural gas field about 120 miles off Australia's coast.

It will be the world's largest offshore facility and is expected to be operational in 2016. It will weigh 600,000 tons, be six times bigger than the largest aircraft carrier (534 yards long and 81 yards wide), and be anchored by an 11,500 ton turret.   

But that's offshore. The excitement is now building for onshore oil and gas in Australia.

The Nascent Australia Shale Oil Industry

Prior to the recent discovery in Australia, the U.S. Energy Information Agency had estimated that Australia already held the fifth-biggest shale gas reserves in the world. Geoscience Australia, the country's geological agency, believes there is at least 400 trillion cubic feet of shale reserves as well as 20 trillion cubic feet of "tight gas.'

No wonder some of the world's oil majors are rushing in.

Join the conversation. Click here to jump to comments…

  1. Dan | February 28, 2013

    One little factor to remember about the shale oil find in Australia is that it sits right underneath the Great Artesian Basin, which is a major underground water resource used for irrigation, drinking water etc. The extraction of shale oil would put this vast and crucial underground water resource at risk. This therefore will become a huge bone of contention which could put the exploitation of shale oil in this part of Australia at risk.

    • rod arnold | March 2, 2013

      No it doesnt-you need to check your geological map-it also shows you have no understanding of basin structure.They are two separate basins and therefore not linked

  2. Alyse. Michalka | February 28, 2013

    On the. arckariga Basin discovery, how can my husband & I invest & make a little money when we can't pay the fees to know the names to invest in.

    He coached & taught 40 years , & I taught 30 years. I guess this is how the poor stay poor & the rich get richer .

    Alyse Michalka

    • Stan | April 10, 2013

      Alyse: I would think that you have investment counselors and companies in Australia just as we do in America. I read the article about your oil reserves a few weeks ago and am now going to invest everything I have saved into your oil fields, through an investment firm, in the hopes that my $4,000.00 will eventually provide something for me and my family. It certainly appears to be a good possibility and I certainly hope that my investment firm will research it and put the money into the best possible company.

  3. phil taylor | February 28, 2013

    As stated by the chief executive of Linc Energy, Mr Peter Bond on January 24th 2013 in the Sydney Morning Herald news paper $ 20 trillion is not our valuation,I don't know who started that ? It's way too early and it's too hard to come up with a reliable figure.
    Whilst it's a large find, no one in Australia expects it to be worth anything like $ 20 trillion.


    Phil Taylor
    Victoria, Australia

  4. Heatblizzard | August 20, 2013

    Despite all the nay sayers in the media it's funny how mother nature puts oil fields in the most remote areas away from animals and real studies show that no animals have been harmed and not only have they not been harmed but are thriving in Alaska.

    Also it doesn't matter how much oil you drill but how many reserves you have to store it! United states used to have over a dozen in the late 60s and now they only have 3 with 1 off line at random times of the year leaving us with 2 randomly.

    If Australia businessmen are smart they will advocate for more oil reserves for hard times like the story in the bible about the 7 year drought and how Egypt got prepared for it.

    Nobody really believed it would happen at first "Ahhhh Joseph is just a conspiracy right wing nut case!" but they did as Joseph asked and the drought not only came but actually affected a good chunk of the Middle East as a result of climate change going on from the end of the last Ice age to Global Warming.

  5. Heatblizzard | August 20, 2013

    In other words people should "make hay while the sun shines!" As they used to say. Sure oil is not renewable so it should be stored in the reserves when not being used.

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