Damon Mcknight
Oil is a liquid that forms when organic matter is buried and exposed to heat and pressure over time. Australia has limited conventional oil resources but large undiscovered unconventional oil resources, including shale oil, tight oil, basin-centred oil, and coal oil. Oil shale deposits are located in Queensland, New South Wales, South Australia, Victoria, and Tasmania. The first oil field in Australia was discovered at Lake Bunga near Lakes Entrance in the Gippsland Basin in 1924, with the first commercial natural gas field discovered in Western Australia in 1964. Most of Australia's oil is produced on the North West Shelf, with the country being a net importer, producing only around 17% of refinery feedstock domestically in 2020.
| Characteristics | Values |
|---|---|
| Oil shale deposits located in | Queensland, New South Wales, South Australia, Victoria and Tasmania |
| Commercial development sites with greatest potential | Rundle, Stuart and Condor sites located near Gladstone, Mackay and Proserpine in Queensland |
| Commercial development sites with potential interest | Duaringa, Byfield, Mount Coolon, Nagoorin, Yaamba, and smaller Alpha and Carnarvon Creek deposits |
| Companies with oil shale development plans and activities | Queensland Energy Resources, Xtract Oil, Australian Thermal Solution, OilCorp, Greenvale Mining |
| Oil production locations | North West Shelf |
| Commercial oil or gas resources | Carnarvon Energy's Apus-1 well |
| Commercial oil reserves in 2020 | 9,300 petajoules (PJ; 1,632 million barrels [MMbbl]) |
| Commercial oil reserves in 2019 | 10,263 petajoules (PJ; 1,803 million barrels [MMbbl]) |
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What You'll Learn
Oil shale deposits in Queensland, New South Wales, South Australia, Victoria and Tasmania
Oil shale deposits are found in several states in Australia, including Queensland, New South Wales, South Australia, Victoria, and Tasmania. The deposits vary in size and age, and some have been commercially exploited for shale oil extraction and other purposes.
Queensland
Queensland has oil shale deposits that vary in size from 1 to 17.4 billion tonnes. The deposits are mainly lacustrine (torbanite and lamosite) of Cenozoic origin, formed in freshwater lakes in grabens, often associated with coal-forming swamps. The Rundle, Stuart, and Condor sites near Gladstone, Mackay, and Proserpine are considered the most promising for commercial development. Other potentially valuable deposits are located at Duaringa, Byfield, Mount Coolon, Nagoorin, Yaamba, and smaller sites like Alpha and Carnarvon Creek. Queensland's oil shale industry began in the 1860s, and the state has the easiest-to-recover deposits in Australia.
New South Wales
New South Wales has a history of oil shale exploitation dating back to 1865, with intermittent operations until 1952. During this period, 16 torbanite deposits were commercially exploited, yielding approximately four million tonnes of oil shale. The extracted shale was used for various purposes, including gas enrichment, petrol/gasoline production, and lubricant production. The New South Wales Shale Oil Company, formed in 1871, was a prominent player in the industry.
South Australia
South Australia is home to oil shale deposits in the Eyre Peninsula and the Toolebuc Formation, which is also found in Queensland and neighbouring states. The state has a smaller oil shale industry compared to Queensland and New South Wales.
Victoria
Victoria has oil shale deposits, but the extent and nature of these deposits are not widely discussed in the sources.
Tasmania
Tasmania has oil shale deposits, with the marine-type oil shale tasmanite of Permian age found mainly in the northwestern districts, particularly the Latrobe-Railton area. Shale oil extraction in Tasmania began in 1910 and ceased in 1935, with a total production of 85,000 barrels. The state has seen oil shale development projects in recent years, with companies like Boss Energy and the Fushun Mining Group planning to develop the Latrobe deposit.
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Oil production in Australia
However, annual oil production increased in 2019 following the start-up of the Greater Enfield, Ichthys, and Prelude projects on the North West Shelf. In 2021-22, Australia produced 891 petajoules (152 million barrels) of crude oil, condensate, and LPG, of which over 85% was exported. Australia's domestic crude oil production continues to decline, and without new commercial discoveries, production is projected to cease within the next 6 years.
Most of Australia's oil is produced on the North West Shelf, some distance from the domestic east coast refining capacity. In addition, domestically produced grades of crude oil are generally not suitable for local refineries compared to other internationally sourced oil. As a result, Australia is a net importer of oil, importing a large proportion of its refinery feedstocks.
Australia has significant undiscovered unconventional oil resources, including shale oil, tight oil, basin-centred oil, and oil shale. Oil shale deposits are located in Queensland, New South Wales, South Australia, Victoria, and Tasmania. Oil shale is the only unconventional oil resource that has been exploited to date, with small-scale production dating back to the 19th century. Several companies in Australia have oil shale development plans and activities, with the first oil produced at a new pilot plant in 2011.
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Oil imports to Australia
Australia is a net importer of oil, with only around 17% of refinery feedstock domestically produced in 2020. This decreased to 12% in 2021. In December 2023, Australia's crude oil imports were reported to be 153.256 barrels per day, down from 170.075 barrels per day in December 2022.
Australian oil production has been in long-term decline since 2009 as new reserve developments have failed to match the rate of depletion in existing fields. However, annual oil production increased between 2019 and 2022 following the start-up of the Greater Enfield, Ichthys and Prelude projects on the North West Shelf. Most of Australia's oil is currently produced on the North West Shelf, some distance from domestic east coast refining capacity. In addition, domestically produced grades of crude oil are generally not suited for local refineries compared to other internationally sourced oil.
Australia's fuel security is precarious, as the country does not have the internationally mandated 90-day stockpile, and the ongoing closure of its refineries means it is on track to be 100% reliant on imported petroleum by 2030. Australian refineries import roughly 83% of the crude oil they process from more than 17 countries, mainly in Asia (40%), but also Africa (18%) and the Middle East (17%). The largest recipients of Australia's exported crude oil are Indonesia and Singapore.
The country's fuel ports represent particularly problematic junctions, and its supply lines through the South China Sea and Indonesia have been recognised as vulnerable. Australia's other major supply route for oil is also threatened by ongoing tensions in the region, as the country finds itself in the middle of the rivalry between the US and China.
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Oil drilling in Australia
The Australian government releases new offshore areas for oil and gas exploration annually, and companies must hold the appropriate permits, leases, and licenses recorded by the National Offshore Petroleum Titles Administrator (NOPTA). Before commencing any petroleum activities in Commonwealth waters, companies must develop a comprehensive environment and safety plan, which is assessed by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA). This plan must include consultations with a range of stakeholders, including government agencies, community groups, and conservation organisations, and must be made available for public comment for at least four weeks.
One example of an upcoming oil drilling project in Australia is Chevron Australia's Wheatstone Deep-1 exploration well, which is targeting a gas reservoir within production licence WA-47-L in Commonwealth waters off the northwest coast of Western Australia. This project is expected to take place between 2023 and 2025 and will involve drilling and evaluation of the geological formation. To mitigate potential environmental risks, Chevron Australia has proposed a 500-metre safety exclusion zone around the drilling unit and will install a blow-out preventer to control and monitor the well during drilling operations.
While Australia's oil production has been in decline since 2009 due to the depletion of existing fields, there have been recent reversals to this trend. For instance, the start-up of the Greater Enfield, Ichthys, and Prelude projects on the North West Shelf led to an increase in annual oil production since 2019. However, it is important to note that domestically produced grades of crude oil in Australia are generally not suited for local refineries compared to internationally sourced oil.
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Oil refineries in Australia
Australia has limited identified conventional oil resources and large undiscovered prospective unconventional oil resources. The country is a net importer of oil, with only around 17% of refinery feedstock produced domestically in 2020, according to one source. Another source, from 2017, puts this figure even lower, at 12%. Most of Australia's oil is currently produced on the North West Shelf, some distance from domestic east coast refining capacity. In addition, domestically produced grades of crude oil are generally not suited for local refineries compared to other internationally sourced oil.
Australia's oil production has been in long-term decline since 2009 as new reserve developments have failed to match the rate of depletion in existing fields. However, annual oil production has increased since 2019 following the start-up of the Greater Enfield, Ichthys, and Prelude projects on the North West Shelf.
Due to the high costs of building new refineries, Australia will likely remain a large import market for refined oil products from refining hubs in Asia, particularly Singapore. Australia closed three of its refineries in the past 10 years, and the remaining four refineries are expected to stay viable.
Oil shale deposits, varying by age and origin, are located in Queensland, New South Wales, South Australia, Victoria, and Tasmania. As of 2012, the total amount of the demonstrated resource is estimated at 58 billion tonnes, with about 25 billion barrels recoverable. Oil shale deposits in Queensland and New South Wales are mainly lacustrine (torbanite and lamosite) of Cenozoic deposits, varying in size from 1 to 17.4 billion tonnes, formed in freshwater lakes in grabens, commonly in association with coal-forming swamps. Several companies in Australia have oil shale development plans and activities. Queensland Energy Resources is one such company, developing the Stuart deposit.
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Frequently asked questions
Oil shale deposits are found in Queensland, New South Wales, South Australia, Victoria, and Tasmania.
As of 2012, the total amount of the demonstrated resource is estimated at 58 billion tonnes, of which about 25 billion barrels are recoverable.
The Rundle, Stuart, and Condor sites located near Gladstone, Mackay, and Proserpine in Queensland.
Queensland Energy Resources, Xtract Oil, Australian Thermal Solution, OilCorp, and Greenvale Mining.
Most of Australia's oil is produced on the North West Shelf, some distance from domestic east coast refining capacity.
