There has always been a belief that Australia's future lies in finding a mineral that is plentiful in the north west of the country. Till now this has not been achieved. Everyone knows that Western Australia is full of iron ore so this is not what they are looking for.
Drilling for many years has just made holes in the ground. Companies have gone over ground already explored before. This is how the latest find was made. There is oil there and in vast quantities. Apache Corp. has made the announcement that was greeted with surprise by some people.
Apache was searching for gas when it made the discovery. Considering Australia's oil production has fallen to its lowest level for forty years this can only be good news.
Income to Western Australia from iron ore has declined due to a fall in Chinese demand. The price for iron ore is down by a third since January. Australia is producing far more ore than it can sell. Coal is not doing well either.
The oil found by Apache is of very high quality so a high price is expected for it when it eventually comes on line. Unfortunately, it could be some time before this happens. Normally developing a new oil field takes decades.
✴ Economics by Ty Buchanan ✴