Shale oil

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what the peak oil alarmists won't tell you and Green Groups hate most

http://www.gladstoneobserver.com.au/news/qer-keen-keep-resources-and-develop-oil-shale/2138924/

Oil shale investors will need deep pockets to fund the next stage of QER's Gladstone development

John McCarthy •
The Courier-Mail •
January 14, 201412:00AM

QUEENSLAND Energy Resources will sell down, rather than sell out of, its cash-hungry oil shale project in Gladstone.

But any investor will need deep pockets because the project's next step could cost up to $900 million.

After pumping "many hundreds of millions'' into a pilot project, QER yesterday said it was not looking to sell its technology or other resources but wanted investors to progress development of a commercial oil shale project.

The company, owned by America's Ziff brothers, faces tough competition for investment funds from the booming American oil shale developments that have changed the face of the energy industry in the US.

"We are engaging in discussions with potential investors. There have been some informal expressions of interest, and people wanting to visit our facility but it is still early in the process, with no definitive outcomes at this time,'' a company spokesman said.

"We know there is competition for capital in the energy sector and that much is being channelled into oil and gas.

"However, in the long- term, our forecasts suggest that a supply gap will continue to emerge in the heavy transport fuel sector and, in addition to having the potential to help service Australia's own growing need for secure heavy transport fuel supplies, Queensland's oil shale resources are on the doorstep of the fastest growing economies in the world.''

QER said it had not determined what level of investment it would accept, or how it would be structured.

"QER's current investors have always said they would require external investment to take the project to the next stage and we have now reached the point where that investment is being sought.

"QER has invested many hundreds of millions, most of which has been spent within Queensland over the last eight to nine years.''

QER has made significant progress on the project compared with the troubled scheme under Southern Pacific Petroleum, which burnt millions of dollars and eventually fell foul of environmental protests.

QER developed its pilot project to a point where it was producing around 8000 barrels a day, primarily ultra-low sulphur diesel.

"The initial project we are proposing to investors would involve capital expenditure of $750 million to $900 million for a small commercial facility."

"QER's current investors have always said they would require external investment to take the project to the next stage and we have now reached the point where that investment is being sought.

"QER has invested many hundreds of millions, most of which has been spent within Queensland over the last eight to nine years.''