Shale Oil

AIMR 2013

Content maintained by Leesa Carson and Anthony Senior

TopShale Oil

Oil shale is organic-rich shale which yields substantial quantities of oil (normally referred to as shale oil) and combustible gas by heating (retorting) and distillation. The organic material in oil shale is called kerogen, which, under appropriate conditions in the Earth’s crust, can be a precursor to conventional oil reservoirs. One tonne of commercial grade oil shale may yield from about 100 to 200 litres of oil.

TopResources

The majority of oil shale resources of commercial interest are located in a series of narrow and deep extensional-basins near Gladstone and Mackay, and further north near Prosperpine in central Queensland (Qld). These are thick Cenozoic lacustrine (lake-formed) deposits which are relatively easy to mine and process compared to carbonate-rich oil shales (marls) elsewhere in the world. The Permian Galilee and Bowen Basins in Qld contain oil shale associated with coal measures. Oil shales also occur in part of the Cretaceous Toolebuc Formation of the Eromanga Basin in northwest Qld. Oil shale deposits of varying quality are located in the Sydney Basin, New South Wales, at the Latrobe tasmanite deposit in northern Tasmania (Tas), at Eyre Peninsular in South Australia (SA) and within an oil shale-heavy mineral sand deposit in southern Western Australia.

Resource estimates were reviewed in 2011 to take into account the historic nature of the estimates and losses resulting from processing. Australia’s shale oil resources estimates are for recoverable shale oil. Paramarginal and Submarginal Demonstrated Resources of shale oil as at the end of 2011 are, Paramarginal 213 gigalitres (GL) (about 1340 million barrels) and Submarginal 2074 GL (about 13 050 million barrels). Both figures are unchanged from 2010.

An Inferred Resource as at the end of 2011 is estimated to be 1272 GL (about 8000 million barrels), also unchanged from 2010. This figure excludes the total potential shale oil resources of the Toolebuc Formation which is estimated to be around 245 000 GL. This estimate was made by Geoscience Australia’s predecessor, the Bureau of Mineral Resources and the CSIRO in 19831. The research project undertook detailed geological, petrophysical and geochemical examination of the oil shales of the Toolebuc Formation. The project was aimed at investigating the resource and developing methods to assist government and industry to assess the potential of the sedimentary sequence as a possible future source of oil shale. The research team also worked to develop an understanding of geological controls and the distribution of oil shale within the Toolebuc Formation. A resource assessment of around 245 000 GL was based on productive oil shale covering an area of 484 000 square kilometres and ranging from 6.5 to 7 metres thick, with a specific gravity of 1.9 and yielding an average 37 litres of oil per tonne oil shale.

TopExploration

With a 20 year moratorium on oil shale development in Qld lifted, activity on exploration projects is slowly returning. Many new exploration leases have been obtained across Qld, especially in the Julia Creek region in the Cretaceous Toolebuc Formation of the Eromanga Basin in northwest Qld.

Axiom Mining Ltd announced three applications for exploration permits for minerals (EPM) covering an area of 980 square kilometres between Croydon and Julia Creek in north Qld. The three applications target oil shale units hosted within the Toolebuc Formation. The tenements aggregate a total strike length of 105 kilometres and cover from 10 to 30 kilometres in the down dip extent. The three tenement application areas, named Blackbull, Whitebull and Redbull, cover a specific area where the oil shale lies from 40 to 120 metres below the surface.

JEMS Qld Pty Ltd has acquired 20 exploration tenements of over 6000 square kilometres over the Toolebuc Formation near Julia Creek in north Qld. JEMS estimates that the deposits have an average thickness of 9.9 metres with approximate oil yields of 55.6 litres per tonne. Depth to top of Toolebuc oil shales vary from 5.6 to 117.2 metres from surface.

TopProduction

There was no oil extracted from oil shale in Australia between 2004 and September 2011. From 2000 to 2004, a demonstration processing plant at the Stuart deposit near Gladstone in central Qld produced more than 1.5 million barrels of oil using a horizontal rotating kiln process (Alberta Taciuk Process). The facility has been dismantled and the site remediated.

In September 2011, Queensland Energy Resources Ltd (QER) produced its first crude oil from its demonstration Paraho IITM vertical shaft kiln processing plant at the Stuart deposit near Gladstone in central Qld. The oil is being stored in secure tanks on-site, awaiting commissioning of the oil upgrading unit (refinery).

The QER demonstration plant achieved stable production capacity of 6000 tonnes of shale a day and oil yield totalling 4500 barrels per stream day while maintaining product quality and adhering to Environment Protection Authority emissions limits. The oil products from the demonstration plant were Ultra Low Sulphur Naphtha (ULSN) 55% to 60% and Light Fuel Oil (LFO) 40% to 45%. The ULSN, which can be used to make petrol, diesel and jet fuel, has a sulphur content of less than one part per million (ppm). To put this into perspective, from 1 January 2008, the Fuel Standard (Petrol) Determination regulated that the maximum content of sulphur is 50 ppm in premium unleaded petrol.

TopWorld Ranking

The 2013 Survey of Energy Resources by the World Energy Council reported that total world in-place resources of shale oil are estimated to be 4.8 trillion barrels. The USA has the largest known deposit of 3 trillion barrels accounting for approximately 77% of world resources, followed by China with 3.5 billion barrels, the Russian Federation with 2.5 billion barrels), the Democratic Republic of Congo with one billion barrels and Brazil with 820 million barrels. Important oil shale deposits are located also in Italy, Israel, Morocco, Jorden and Estonia, as well as Australia. The USA, China, Estonia and Brazil are producing oil shale.

TopIndustry Developments

Queensland Energy Resources (QER) announced that it will conclude the technology demonstration program (Paraho IITM vertical shaft kiln processing plant) at the Stuart deposit near Gladstone in central Qld in early 2014. The company is seeking partners to progress the development of a commercial oil shale project. QER stated that the technology demonstration plant had operated successfully for two years, and that sufficient data is available to support the case for a commercial project. QER produce its first crude oil in September 2011 and submitted a final report to the Queensland Government in September 2012 indicating there were no reportable environmental incidents at the plant during all phases of construction, commissioning and operations, and there were no community complaints about odour and noise.

Intermin Resources Ltd has announced the completion of a drilling program comprising of 22 air core holes for 1427 metres at the Lilyvale prospect, which is part of the Richmond Oil Shale project about 50 kilometres northwest of Richmond in north Qld. Organic carbon results received from 18 holes confirm the historic oil grade and thickness of the Toolebuc oil shale over substantial areas of Intermin’s tenements. Drilling has outlined an area with significantly higher organic carbon values than those previously recorded. Intermin also undertook Modified Fischer Assays on two of the drill holes (28 samples). These assay results established the fresh oil shale horizon and recorded oil yields of 9 metres at 73.2 litres a tonne and 7 metres at 78.1 litres a tonne. Additional analytical work will be undertaken to determine metal values (vanadium, molybdenum, copper, nickel and silver) within the oil shale. Intermin aims to develop a pre-concentration process whereby the organics and the vanadium, molybdenum and nickel metals are concentrated prior to retorting for the oil recovery.

Greenvale Mining NL will progress exploration programs for its Alpha, Lowmead and Nagoorin projects. The company has release updated Joint Ore Reserve Committee (JORC) Code resource inventory for Nagoorin and Lowmead projects with total estimated in-situ resource for Nagoorin (2445 million barrels of oil) and for Lowmead (706 million barrels of oil). Greenvale has advised that it has been approached by investors and technology providers interested in the company.

Boss Resources Ltd has completed 3D modelling work from its drill hole data base on the Latrobe Oil shale project in Tas.

Global Oil Shale Group has prepared an exploration plan for its Julia Creek oil shale project comprising a 35 000 metre reverse circulation drilling program of 700 drill holes over an area of approximately 150 square kilometres. The company has prepared an extensive testing program also for the oil shale samples to evaluate oil concentration and thermal processing of the oil shale.

Linc Energy Ltd announced that two separated commissioned and independent reports have confirmed a significant oil shale resource potential in three formations, the Stuart Range, Boorthanna and Pre-Permian, in the Arackaringa Basin near Coober Pedy in SA. Prospective resource estimates for unconventional reservoirs in the Arckaringa Basin range between 103 billion barrels and 233 billion barrels.

TopNotes

  1. Ozimic, S. and Saxby, J.D., 1983. Oil Shale Methodology: An examination of the Toolebuc Formation and the laterally contiguous time equivalent units, Eromanga and Carpentaria Basins. Bureau of Mineral Resources and CSIRO research project.
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