The US Energy Information Administration has produced a report on global shale oil and gas reserves, including for Australia. Find the useful excerpts below:
When considering the market implications of abundant shale resources, it is important to distinguish between a technically recoverable resource, which is the focus of this report, and an economically recoverable resource. Technically recoverable resources represent the volumes of oil and natural gas that could be produced with current technology, regardless of oil and natural gas prices and production costs. Economically recoverable resources are resources that can be profitably produced under current market conditions. The economic recoverability of oil and gas resources depends on three factors: the costs of drilling and completing wells, the amount of oil or natural gas produced from an average well over its lifetime, and the prices received for oil and gas production. Recent experience with shale gas in the United States and other countries suggests that economic recoverability can be significantly influenced by above-the-ground factors as well as by geology. Key positive above-the-ground advantages in the United States and Canada that may not apply in other locations include private ownership of subsurface rights that provide a strong incentive for development; availability of many independent operators and supporting contractors with critical expertise and suitable drilling rigs and, preexisting gathering and pipeline infrastructure; and the availability of water resources for use in hydraulic fracturing.
Because they have proven to be quickly producible in large volumes at a relatively low cost, tight oil and shale gas resources have revolutionized U.S. oil and natural gas production, providing 29 percent of total U.S. crude oil production and 40 percent of total U.S. natural gas production in 2012. However, given the variation across the world’s shale formations in both geology and above-the-ground conditions, the extent to which global technically recoverable shale resources will prove to be economically recoverable is not yet clear. The market effect of shale resources outside the United States will depend on their own production costs, volumes, and wellhead prices. For example, a potential shale well that costs twice as much and produces half the output of a typical U.S. well would be unlikely to back out current supply sources of oil or natural gas. In many cases, even significantly smaller differences in costs, well productivity, or both can make the difference between a resource that is a market game changer and one that is economically irrelevant at current market prices.
With geologic and industry conditions resembling those of the USA and Canada, Australia has the potential to be one of the next countries with commercially viable shale gas and shale oil production. As in the US, small independents have led the way, assembling the geological data and exploring the high potential shale basins of Australia, Figure III-1.
International majors are now entering these plays by forming JV partnerships with these smaller independents, bring capital investment to the table. But, with the remoteness of many of Australia’s shale gas and shale oil basins, development will likely proceed at a moderate pace.
This report assesses the shale gas and shale oil potential in six major Australian sedimentary basins having sufficient geologic data for a quantitative assessment. Additional potential is likely to exist in other basins not yet assessed.
The six assessed shale gas and oil basins of Australia hold an estimated 2,046 Tcf of risked shale gas in-place, with 437 Tcf as the risked, technically recoverable shale gas resource, Tables III-1A, III-1B, and III-1C. These six basins also hold an estimated 403 billion barrels of risked shale oil in-place, with 17.5 billion barrels as risked, technically recoverable shale oil resource, Tables III-2A and III-2B.
Of the six assessed basins, the Cooper Basin, Australia’s main onshore gas-producing basin, with its existing gas processing facilities and transportation infrastructure, could be the first commercial source of shale hydrocarbons. The basin’s Permian-age shales have a nonmarine (lacustrine) depositionals and the shale gas appears to have elevated CO2 content, both factors adding risk to these shale gas and shale oil plays. Santos, Beach Energy and Senex Energy are testing the shale reservoirs in the Cooper Basin, with initial results from vertical production test wells providing encouragement for further delineation.
The other prospective Australian shale basins addressed in this report include the small, scarcely explored Maryborough Basin in coastal Queensland, that contains prospective Cretaceous-age marine shales thought to be over-pressured and gas saturated. The Perth Basin in Western Australia, undergoing initial testing by AWE and Norwest Energy, has prospective marine shale targets of Triassic and Permian age. The large Canning Basin in Western Australia has deep, Ordovician-age marine shales that are roughly correlative with the Bakken Shale in the Williston Basin. In Northern Territory, the Pre-Cambrian shales in the Beetaloo Basin and the Middle Cambrian shale in the Georgina Basin have reported oil and gas shows in shale exploration wells. If proved commercial, these two shale gas and shale oil basins would become some of the oldest producing hydrocarbon source rocks in the world.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
