An application of sequence stratigraphy in modelling oil yield distribution the stuart oil shale deposit, queensland, australia

AN APPLICATION OF SEQUENCE STRATIGRAPHY
IN MODELLING OIL YIELD DISTRIBUTION
THE STUART OIL SHALE DEPOSIT,
QUEENSLAND, AUSTRALIA

Graham John Pope
B.Sc (Applied Geology) UNSW

A thesis submitted for the degree of Master of Science from the
Queensland University of Technology.

School of Natural
Resource Sciences
August 2000
Supervisors: Dr. S. Lang, National Centre for Geology & Geophysics, University of
Adelaide (formerly Senior Lecturer, Queensland University of
Technology).
Dr. A. White, Andrew White & Associates.


Keywords: sequence stratigraphy, oil shale, oil yield, kerogen, Fischer Assay,
computer modelling, lacustrine, lacustrine parasequence, Stuart Oil Shale Deposit,
The Narrows Graben, Rundle Formation, Tertiary, Australia.


ABSTRACT

The Stuart Oil Shale Deposit is a major oil shale resource located near Gladstone on
the central Queensland coast. It contains an estimated 3.0 billion barrels of oil in
place in 5.6 billion tonnes of shale. Commissioning of a plant capable of producing
4,500 barrels per day has recently commenced. The shale is preserved in Tertiary

age sediments of The Narrows Beds in the southern part of The Narrows Graben.
The oil shale sequence consists of repetitive cycles composed of oil shale, claystone
and lesser carbonaceous oil shale in the 400 metre thick Rundle Formation. The
formation is the main oil-shale bearing unit in the preserved half-graben sequence up
to 1,000 metres thick.

Previous studies on the lacustrine sedimentology of the Rundle Oil Shale Deposit in
the northern part of The Narrows Graben have recognised eight facies that exhibit
unique and recognisable cycles. The cycles and sequence for the Kerosene Creek
Member of the Rundle Formation is correlatable between the Rundle and Stuart
deposits. The nature of these facies and the cycles is reviewed in some detail. In
conjunction with the principles of sequence stratigraphy, the ideal oil shale cycle is
described as the equivalent of a parasequence within a lacustrine system. The
lacustrine parasequence is bounded by lacustrine flooding surfaces. The organic
material in the oil shale consists of both Type I (algal dominated) and Type III
(higher plant matter dominated) kerogen. Where Type I kerogen dominate, oil yields
greater than about 100 litres per tonne are common. In contrast where Type III
kerogens are dominant, yields above 100 litres per tonne are rare. The variation in
oil yield is described for the Stuart lacustrine system. The variation is consequent on
the balance between production, preservation and degradation of the kerogen in the
parasequences within systems tracts. A system for the recognition of oil shale
deposition in terms of lacustrine systems tracts is established based on oil yield assay
parameters and the assay oil specific gravity.

The oil yield and oil specific gravity variation within the Rundle Formation is
modelled by member and the nature and distribution of oil yield quality parameters
in terms of the contribution of organic and inorganic source material are described.


The presence of significant oil yield (greater than 50 litres per tonne) is dependent on

the dominance of lacustrine transitional systems tracts and to a lesser extent,
lacustrine highstand systems tracts within the parasequence sets deposited in a
balanced lake system in a generally warm wet climate during the middle to late
Tertiary.

ii


CONTENTS
ABSTRACT

I

ABBREVIATIONS

IV

ACKNOWLEDGEMENTS

VI

INTRODUCTION

1

Rationale

1

Aim of the Thesis

2

Scope and Objectives
Scope of this Work
Objectives
Significance

3
3
3
5

Economic Background
History of Oil Shale

6
7

Definition and Classification of Oil Shale
Oil Shales in Australia
Tertiary Oil Shale Deposits of Queensland

GEOLOGY AND SEDIMENTOLOGY

9
15
16

18

History and Previous Work

18

Geological Setting of The Narrows Graben

21

Stratigraphy of The Narrows Graben

23

Sedimentation in Tertiary Oil Shale Sequences

27

Oil Shale Facies - Degradation and Preservation
Overview
Sedimentation – Mineral and Organic Matter
Degradation and Preservation
Sedimentary Facies and Cycles in the Narrows Graben
Sequence Stratigraphy in The Narrows Graben
Sequence Stratigraphic Patterns in lacustrine Systems
Cyclicity in the Rundle Formation
Sedimentological Factors Contributing to Oil Shale Character

29
29
31

31
32
40
45
49
50

METHODS AND STRATEGY

51

Modelling Oil Shale Quality Parameters

51

Software Requirements
Software Used

51
51

i


Background to the Datasets
Dataset History
Dataset Compilation And Verification
Datasets and Files Generated

RESULTS

53
53
53
55

56

Data Analysis
Data Statistics
Data Population Analysis
Data Spatial Continuity

56
56
61
91

Modelling and Model Analysis
Models Generated
Model and Data Visualisation
Model Analysis

92
92
96
98

DISCUSSION

109

CONCLUSIONS

113

REFERENCES

114

LIST OF FIGURES:
Figure 2: Oil Shale classification based on maceral composition and environment of deposition (after
Hutton et al. 1980 & Hutton, 1982). ........................................................................................... 10
The Stuart Oil Shale Deposit is classified as a lamalginite dominated lamosite with kerogen precursors
related to the present-day blue-green algae Pediastrum. ............................................................ 10
Figure 3: Principal types an devolution paths of kerogen types I, II and III. ...................................... 12
Figure 4: General scheme of hydrocarbon formation and kerogen evolution as a function of burial. 14
Figure 5: Location of the major Tertiary oil shale basins and oil shale deposits of Queensland......... 17
Figure 6: Regional geology and structural setting of The Narrows Graben. ....................................... 22
Figure 7: Interpretive subcrop geology map of the Stuart and Rundle Oil shale Deposits, The Narrows
Graben. ....................................................................................................................................... 24
Figure 8: Schematic cross-section showing the relationship of the Curlew and Worthington
Formations and Rundle Formation members of The Narrows Graben sequence. ...................... 26
Figure 9: Palaeoreconstruction of seafloor spreading around Australia at 45Ma................................ 28
Figure 10: Kerosene Creek Member correlation diagram for the Rundle and Stuart Oil Shale
Deposits. ..................................................................................................................................... 33
Figure 11: Schematic block diagrams illustrating the geological evolution of The Narrows Graben. 35
Figure 12: Ideal composite parasequence for oil shale in The Narrows Graben (parasequence
lithological cycle based on composite cycle of Coshell, 1986). ................................................. 42
Figure 13: Sequence and parasequence composition for the Kerosene Creek Member of the Rundle

Formation, The Narrows Graben. ............................................................................................... 44
Figure 14: Cumulative thickness plot for parasequences of the Kerosene Creek Formation. ............. 45
Figure 15: Schematic diagrams showing cross-section models and the relationship of sequences in the
Rubielos de Mora Basin (from Anadon et al., 1991). ................................................................. 47
Figure 16: Illustration of interaction of eustacy and subsidence to produce parasequences and
sequences in marine settings (from Van Wagoner, et al., 1990)................................................. 48
Figure 17: Drillhole locations for the studied dataset, Stuart Oil Shale Deposit................................. 54
Figure 18: Drillhole locations for the boxed area shown on Figure 17. .............................................. 55
Figure 19: Histogram and cumulative frequency plots-sample thickness. .......................................... 58
Figure 20: Histogram & cumulative frequency plots - sample bulk density. ...................................... 64
Figure 21: Scatter plots of sample bulk density by formation and member. ....................................... 65

ii


Figure 22: Proportional effect by drillhole location - sample bulk density. ........................................ 66
Figure 23: Histogram & cumulative frequency plots -total moisture................................................... 68
Figure 24: Scatter plots of total moisture by formation and member.................................................. 69
Figure 25: Proportional effect by drillhole location - total moisture................................................... 70
Figure 26: Histogram & cumulative frequency plots - oil relative density. ......................................... 72
Figure 27: Scatter plots of oil relative density by formation and member. ........................................ 73
Figure 28: Proportional effect by drillhole location – oil relative density.......................................... 74
Figure 29: Histogram & cumulative frequency plots - oil yield mass percent. .................................... 76
Figure 30: Scatter plots of oil yield mass percent by formation and member. .................................... 77
Figure 31: Proportional effect by drillhole location - oil yield mass percent. ..................................... 78
Figure 32: Histogram & cumulative frequency plots - oil yield mass percent dry............................... 81
Figure 33: Scatter plots of oil yield mass percent dry by formation and member............................... 82
Figure 34: Proportional effect by drillholes location - oil yield mass percent dry. ............................. 83
Figure 35: Histogram & cumulative frequency plots –oil yield MFALT0M. ...................................... 85
Figure 36: Histogram & cumulative frequency plots -MFA gass+loss%............................................. 87

Figure 37: Scatter-plot - %OIL_DRY v BD (2m samples) and best-fit curve. ................................... 89
Figure 38: Scatter-plot %OIL_DRY v BD (2m samples) Curlew Formation and Humpy Creek
Member sub-groups.................................................................................................................... 89
Figure 39: Scatter-plot %OIL_DRY v BD (2m samples) oil specific gravity populations. ............... 90
Figure 40: Scatter-plot %OIL_DRY v BD (facies samples) distinguished by Formation and Member.
.................................................................................................................................................... 90
Figure 41: Downhole variogram – 2m sample data. ........................................................................... 92
Figure 42: Omni-directional variogram for Rundle Formation Members - 2m sample data............... 92
Figure 43: Minemap model cross-sections for the Stuart Oil Shale Deposit...................................... 94
Figure 44: Minemap long-sections for the Stuart Oil Shale Deposit. Vertical extent of Cells plotted
represent Members of the Rundle Formation and Curlew Formation. ....................................... 95
Figures 45: Oil yield and Oil SG contour plots for the Teningie, Ramsay Crossing, Brick Kiln,
Humpy Creek and Munduran Creek Members of the Rundle Formation................................. 100
Figures 46: Oil yield and Oil SG contour plots for the Telegraph Creek Member MAT and Kerosene
Creek Member sub-units D2 to B1 of the Rundle Formation................................................... 104
Figures 47: Oil yield and Oil SG contour plots for the Kerosene Creek Member sub-units B2 & A of
the Rundle Formation and the Curlew Formation. ................................................................... 107

LIST OF TABLES
Table 1: Stuart Oil Shale Deposit Resource Estimate.
6
Table 2: Summary of Primary Characteristics of some Queensland Tertiary Oil Shales.
19
Table 3: Stratigraphic Table – Stuart Oil Shale Deposit.
25
Table 4: Summary Criteria for Facies Recognition
36
Table 5: Environments of Deposition for Facies and Sub-facies
37
Table 6: Summary of Narrows Graben Lacustrine Systems Tract Facies Parameters.

43
Table 7: List of Intersections used in compiling data analysis.
56
Table 8: Summary statistical data for MFA qualities for oil shale units in the Stuart Oil Shale Deposit,
two-metre composite assay data.
59

LIST OF APPENDICES
Appendix 1: Modified Fischer assay Procedure.
Appendix 2: Tables of General Statistical Data by formation and member for modified Fischer Assay
results.

iii


ABBREVIATIONS

%Oil_DRY
AA_moist
AR_moist
bbl
BD
FS
G+L%
HST
LST
LT0M
MASS%OIL
MFA
MFALT0M

MFS
OIL_SG
SB
TST
USgal/ton

Oil Yield weight percent dry basis (total water free basis)
Analysed moisture (analysed moisture on an oven dried basis)
Total Moisture (includes air dried, oven dried & and analysed
US barrel or 159 litres
Whole rock bulk density
Flooding surface
Gas plus loss in weight percent
Highstand Systems Tract
Lowstand Systems Tract
Litres per metric tonne on a total water free (zero weight
percent moisture) basis
Oil Yield weight percent (oven dry basis)
Modified Fischer Assay
Litres per metric tonne on a total water free (zero weight
percent moisture) basis measured by modified Fischer Assay
Maximum flooding surface
Oil relative density (measured on MFA oil yield)
Sequence boundary
Transitional Systems Tract
US gallons per 2000 pounds

iv

The work contained in this thesis has not been previously submitted for a degree or
diploma at any other tertiary institution. To the best of my knowledge and belief, the
thesis contains no material previously published or written by another person except
where due reference is made.

Signed:

Date:

17 May 2004

v


ACKNOWLEDGEMENTS

I would like to thank Southern Pacific Petroleum NL and Central Pacific Minerals
NL for both the use of and access to the geological and assay data on the Stuart Oil
Shale Deposit, software modelling programs and computing resources. In addition,
discussions with other company geologists and consultants involved in oil shale
exploration not only at Stuart but also on other oil shale deposits have contributed to
my interest in understanding of oil shale processes over many years. Special thanks
go to Dr L. Coshell, Mr D. Dixon, Mr J. Ivanac, Mr A. Lindner and Mr R. McIver.

My supervisor Dr S. Lang is acknowledged for his continued enthusiasm and
assistance during the various changes of emphasis in the work over the years. The
support of Dr A. White of Andrew White and Associates and the assistance of the
staff of the School of Natural Resource Sciences at Queensland University of
Technology are also acknowledged.

In particular, thanks must also go to my family; Sue, Alexander and Katrina for their
continued patience and support particularly over final stages of preparation.

vi


INTRODUCTION
Rationale
Oil shale is found in a diverse range of sedimentary environments – marine, fluvial
and lacustrine are the principal settings (Demaison & Moore, 1980, Katz, 1990).
Lacustrine oil shale deposits represent a significant proportion of hydrocarbon
resources worldwide. Not only are they in many instances the prime source rocks for
economic oil fields in many petroleum basins but also in the right setting make
attractive targets for exploitation in their own right. Composed almost entirely of
algal remains, there is a direct relationship between oil shale pyrolysis yield and the
abundance and preservation of organic matter. In a lacustrine setting, high frequency
changes in lake level and sediment influx impart a characteristic cyclical sequence of
newly deposited organic matter often overprinted by degradation. The principles of
sequence stratigraphy can be used to quantitatively map the cyclical arrangement and
oil yield parameters in a lacustrine oil shale sequence and add to the understanding
and modelling of oil yield within oil shale deposits.

The relationship between the pyrolysis yield of organic-rich shale and the content
and type of kerogen has long been the focus of study of hydrocarbon source rocks
(Demaison & Moore, 1980, Fleet et al., 1988, Smith, 1990). In times of extreme fuel
shortages and before the discovery of conventional oils, oil shale played an important
role in providing liquid hydrocarbons. With a rising demand for transportation fuels,
the oil price shocks of the early 1970’s and uncertainties with the traditional source
of supply from the Middle East, the focus on alternative commercial sources for oil
often shifted to investigation of oil shale.

This study examines the relationships between the organic type and oil content in one
of the largest Tertiary lacustrine oil shale basins in Australia, The Narrows Graben
on the central Queensland Coast. The graben contains up to 1000 metres of sediment
dominated by oil shale. Since the recognition of the large size of the oil shale
resource in the Rundle Deposit, the main oil shale unit, the Rundle Formation, has
been investigated for the potential to recover the oil in the Rundle and Stuart Oil
Shale Deposits (Lindner & Dixon, 1976). In this work the sedimentological and
1


stratigraphic relationships of the oil shale members of the Rundle Formation in the
Stuart Oil Shale Deposit are reviewed in the context of the oil yield of the sediments.

Traditionally, drilling and assaying has been the primary evaluation tool in the
exploration phase of the examination of deposits. The fine-grained nature of oil
shale deposits in thick sequences has long been a problem in establishing a
correlation within an oil shale basin. Detailed work in The Narrows Graben
established a stratigraphy based on cycles within the sequence (Coshell, 1986). The
sedimentary cycles exhibit an oil yield pattern related to the nature and content of
kerogen preserved in each cycle. The grade or oil yield is related to these cycles.
More recently, the principles of sequence stratigraphy have been applied to the
interpretation of lacustrine sequences (Liro, 1993).

Aim of the Thesis
The principal aim of this work is to review the sedimentological, structural and
depositional character of oil shale and to integrate these aspects with the recent
advances in the sequence stratigraphy of lacustrine systems using the Stuart Oil
Shale Deposit as an example. Definition of sequences with defined organic source
properties can then be used during the process of modelling the grade distribution

and variability for the deposit. Application of the relationships between sedimentary
features and the grade of shale oil will result in a more robust resource model on
which to base the economic exploitation of the shale oil in the deposit.

In addition, comment on the application of the study findings to the development of a
method of estimation of probable oil yield based on facies and cycles within the
framework of sequence stratigraphy can be made.

2


Scope and Objectives

SCOPE OF THIS WORK

The shale oil is contained in five oil shale members of the Rundle Formation. The
resource is based on the subsurface results of drilling with assay control based on the
modified Fischer Assay (MFA). Detailed facies relationships and cyclic sedimentary
sequences that show distinctive qualitative oil yield characteristics are well defined
for the northern section of the Narrows Graben (Coshell, 1986). These relationships
have been applied to the Kerosene Creek Member, the uppermost member of the
Rundle Formation, and correlation throughout The Narrows Graben has been
demonstrated (Coshell, 1986, Coshell and McIver, 1989). Correlation based on
facies relationships has been described for the complete Rundle Formation in the
northern section of The Narrows Graben. The facies description and logging for the
majority of the Rundle Formation at Stuart has not been completed. A similar facies
and cycle relationship is expected for the balance of the Rundle Formation at the
Stuart based on the two drillholes that have been logged by facies. The recognition
of the same facies and cycles in these holes suggests the remainder of the Stuart
sequence elsewhere will correlate with the Rundle sequence to the north.

This thesis will:
1. Examine the cyclic nature of the oil shale stratigraphy at Stuart and discuss the
various aspects of oil yield in relation to oil shale facies in a sequence
stratigraphic framework, and

2. Use the tools of computer modelling software to examine the broad environment
of deposition, and distribution of oil yield within the deposit.

OBJECTIVES

Given the general geological relationships outlined above, it is proposed to examine:

3


1. The population statistics of the main Modified Fischer Assay components
including total moisture content, shale oil content, oil specific gravity, together
with rock bulk density for both the total deposit (Rundle Formation) and the
individual stratigraphic members as appropriate,

2. Any lithological (facies) controls/associations of the various populations found in
the above exercise, and

3. The basis for the development of a model for the spatial distribution of shale oil
and, where supported by appropriate data, oil shale facies and member variation
(thickness).

It is also proposed to explore the more recent aspects of the application of sequence
stratigraphy to lacustrine basin settings, architecture and structure of the sedimentary

packages observed within these systems. The deeper basinal facies are of particular
interest since these sequences are the most likely host to thick sequences of oil shale.
Of particular interest will be:

1. The application of sequence stratigraphic principles to assist in the
understanding of the facies relationships and basin structure/tectonics of
lacustrine systems and, links (if any) to eustatic sea level changes in the marine
environment and the influence of climate changes on lake level,

2. The determination of key surfaces - transgressive surfaces and sequence
boundaries - using facies and cycles and the grade distribution,

3. To determine the lacustrine system tract equivalents of highstand (HST),
transitional (TST) and lowstand (LST), and associated flooding surfaces (FS) in
an oil shale system,

4. To determine the relationships between system tracts and the grade distribution
within the deposit, and

5. The use these relationships, to contribute to the predictive model for the deposit.
4


SIGNIFICANCE

Overall, the significance of the study of the relationships and parameters outlined
above will:

1. Provide a basis for correlation within the fine-grained oil shale sequences of the
deposit. This is not generally possible without the recognition of a readily

identifiable facies succession (package), prior knowledge of the member facies
cycle, and modified Fischer Assay data for the section under examination,

2. Enable a more precise estimation of the spatial distribution (and geostatistical
continuity) of shale oil yield within the deposit,

3. Determine of the level of investigation required to adequately define the shale oil
resource within oil shale deposits, for audit and commercial viability studies in
particular (drill-hole spacing, sampling intervals etc), and

4. Add to the understanding of thick sequences of lacustrine shale in a sequence
stratigraphic framework that may lead to the prediction of oil plays in lacustrine
settings.

The parameters mentioned in points 2 and 3 above are commonly used in resource
investigation of coal and mineral deposits (and their limitations well known). This is
not the case for oil shale deposits due to the paucity of recent commercial
exploitation of these deposits. Estimates of the continuity and variability of
important oil shale qualities (such as oil yield and moisture content) can be made
geostatistically, however the value of such estimates must clearly be understood in
the light of the sedimentological and stratigraphic framework of the deposit under
examination. The Stuart Oil Shale Deposit represents an excellent opportunity to
establish these parameters for future application during the exploitation of the
deposit.

5


Economic Background
In April 1999, Southern Pacific Petroleum NL, Central Pacific Minerals NL

(SPP/CPM) and Suncor Energy Australia (Suncor) commenced commissioning a
A$250 million R&D demonstration plant to test a new technology for the production
of shale oil from the Stuart Stage 1 Project. The Stuart Stage 1 development is based
on the Kerosene Creek Member of the Rundle Formation. Initially, the plant was
scheduled to complete commissioning by late 1999, producing oil at a design rate of
4,500 barrels per day (bpd). The first production of raw shale oil was in August 1999
with two hot test runs using oil shale completed at rates of up to 50% of design
capacity. Runs in November although mechanically successful, were halted after
reports of odour in a neighbouring community. The need to resolve the air emissions
issues to meet regulatory requirements and address concerns of the companies and
those of the neighbouring rural community have delayed commissioning activities.
Depending on the success of the demonstration plant (Stage 1) and the scale-up to a
commercial-sized module (Stage 2), the project could be expanded to a fully
commercial scale by 2007 (Stage 3), producing approximately 85,000 barrels per
day.

The Stuart Oil Shale Deposit has an estimated total resource of 3.0 billion barrels
(Bbls)1 contained in 6.5 billion tonnes of shale at an average grade of 91 litres per
tonne at zero percent moisture (LT0M). The distribution of the categories of the
resource is given in Table 1.

Table 1: Stuart Oil Shale Deposit Resource Estimate.
Resource at cut-off grade of 50 Litres per tonne at zero moisture (LT0M)
Tonnes
Moisture
Grade
Resource Category
x 109
(wt %)
(LT0M)

In-situ Oil
(Bbbls)

Measured

0.7

17.9

113

0.4

Indicated

5.5

18.5

89

2.5

Inferred

0.3

18.5

76

0.1

Total

6.5

18.4

91

3.0

(Source: Southern Pacific Petroleum NL, 1999).

1

Bbl is 1 billion US barrels, i.e. 1 000 million US barrels of 159 litres, 1 Bbbl =159 GL.

6


To efficiently extract any resource, a thorough understanding of the distribution and
variation of grade (oil yield) within the resource is highly desirable. Understanding
the quality parameters that contribute to the resource grade and variability greatly
enhance the efficient extraction and development of the resource.

HISTORY OF OIL SHALE
Oil shale has been exploited in one form or another for centuries from

countries throughout the world. The organic content allows its direct use as a heat
source in light, heat and in power generation or, use of the derived oil products as
transportation fuels and power generation. It is used as a decorative stone, was and is
used for jewellery and ornaments in cottage industries, provides the basis for oil
production and electricity generation in China and Estonia and most importantly is
an important source rock for the generation of oil.

With the onset of the modern industrial revolution, kerosene, oil and wax products
from oil shale provided the bulk of the fuel requirements for machinery and the
blossoming internal combustion engine in the mid to late 19th century. Commercial
exploitation of oil shale began to suffer following the discovery of “conventional”
crude petroleum in Pennsylvania, USA in 1859. In Australia, production of oil from
oil shale for indigenous consumption began in 1865. Earlier, exports of N.S.W
torbanite to England and the U.S.A for gas production to enhance the lighting power
of the local reticulated gas used in street lighting proved profitable (Cane, 1979).
Australian shale oil production could not sustain competition with the imported crude
oil produced by the emerging American oil companies and indigenous production
waned. Strategic shortages that arose during the major global wars and serious
recessions of the late 19th and early 20th centuries saw periodic revival of the
domestic industry. Australian production declined rapidly following the removal of
the duty on imported kerosene by the Federal Government in 1904 although the last
production did not come until 1952 when the mines and shale works at Glen Davis in
NSW finally closed.

7


The onset of increased consumption coupled with the “oil shock” in 1973 (when the
spot price of oil rose rapidly to US$25 from a base of US$10) together with the
subsequent price rises to a high of US$45/barrel during 1981, served to revive the

interest in oil shale as an alternative, competitive source for basic transportation and
heating fuel (Figure 1). Small developmental mines were established and pilot plants
built in the U.S.A, utilising oil shales of the Green River Formation in Colorado, and
on the Irati Formation in Brazil. Although the price of oil has remained subdued
since the oil price collapse in the mid 1980’s, recent tightening of oil production by
OPEC has seen a steady increase in price to levels reminiscent of the early 1980’s.
Despite the large degree of Australian self-sufficiency in oil products, the rising oil
price during the 1970’s provided justification for a renewed consideration of oil shale
as an alternative indigenous source of liquid hydrocarbons and as a strategic
resource.

1991 US$ per Barrel

50
40

1859
Pennsylvannia
Oil Rush

1986 Oil
Price
Collapse
1873 Baku
Russia Discovery
1900
Texas-Oaklahoma
Rush
1938 Kuwait -Saudia
Arabia Discoveries

30
20
10
0
1840

1880

1920
YEAR

2000
Price
Surge

1973 Arab Oil
Embargo
1967
6-Day
War

1990
Iran-Iraq
War

1960

2000

Figure 1: Effect of oil discoveries and oil industry shocks on the price of oil
(Modified from Yergin, 1991)

Currently, Australia’s demonstrated and inferred shale oil resources amount to
approximately 283 billion barrels of shale oil, 90% of which is an inferred resource
contained in the Cretaceous Toolebuc Formation of the Eromanga and Carpentaria
Basins of Central Queensland (Gibson, 1980, Gibson and Rutland, 1981, Bureau of
Resource Sciences, 1998). The demonstrated resources regarded as sub-economic
amount to about 22 billion barrels of shale oil and are accounted for by the oil shales
in organic-rich lacustrine sediments of early Tertiary age preserved in number of
elongate basins over a distance of 500km along the central coastal region of
8


Queensland (Bureau of Resource Sciences, 1998). The Stuart Oil Shale Deposit is
one of these occurrences.

Definition and Classification of Oil Shale
Although there is no standard definition, the term oil shale is generally applied to a
finely laminated rock containing sufficient kerogenous material to yield
hydrocarbons when heated (hence their importance as a source rock for generation of
hydrocarbons for petroleum reservoirs). Kerogen is essentially that part of an
organic rock that is neither soluble in aqueous alkaline solvents nor in common
organic solvents but is generally recoverable by destructive distillation (Tissot &
Welte, 1978). Although coals will also yield oils (or bitumen) on pyrolysis, unlike
oil shales they also yield appreciable oil to solvent extraction. Oil shales that are too
thermally immature and have generated little or no hydrocarbons on diagenesis and
burial can be exploited as a source for commercial extraction of oil.

There have been a number of definitions applied to oil shale using energy balance

but in general an oil shale can be defined as a kerogen bearing rock which yields at
least as much energy as that used in the extraction process. Tissot and Welte (1978)
defined an economic oil shale as one that had an organic content of at least 5% by
weight (a yield of about 25 litres/tonne). Taylor (1987) considered 15 USgal/ton (63
litres/tonne) a rich oil shale. Synonymous terms used to describe deposits of organic
matter (apart from coals) that have been variously applied to oil shales include black
shale, cannel coal, carbonaceous shale, kerosene shale and kerogenous shale.

Hutton et al. (1980) proposed a framework for the classification of oil shales based
on algal types following petrographic examination of the organic matter in a number
of occurrences in the Tertiary and Cretaceous deposits of Queensland and the Green
River Formation in the USA (Figure 2). The Stuart deposit is classified as a
lamosite, dominated by lamalginite with lesser telaginite, sporinite, resinite and
vitrinite.
`

9


CHLOROPHYCEAE
(green algae)

Parent Genus

Gloeocapsomorpha
prisca

Modern-Day
Equivalent

Reinschia

Pila

Botryococcus
braunii

Mixed

Tasminites
punctatus

CYANOPHYCEAE
(blue-green algae)

Dinoflagellates
acritarchs algae
(Nostocopsis)

Pachysphaera

Blue-green algae

Pediastrum
species

Life Form

Colonial

Colonial

Colonial

Unicellular

Dominant
Liptinite

Telalginite

telalginite

Telalginite

Telalginite

Bituminite
Micrinite

Lamalginite

Lamalginite

Oil Shale

Kukersite

Torbanite

Torbanite

Tasminite

Marinite

Lamosite

Lamosite

Non-Algal
Organic
Compounds

?

vitrinite
inertinite
sporinite
resinite

vitrinite
inertinite
sporinite

vitrinite
lamalginite

liptodetrinite
ltelalginite

inertinite
sporinite

corpohuminite
sporinite
vitrinite
bitumen

vitrinite
telalginite
sporinite
resinite
bitumen
corpohuminite

Deposit

Estonia.
Nawabi Kas (Pakistan)

Westfield
Torbane Hill,
N.S.W.

Mersey River, Tas

Toolebuc Formation,
Qld.
Posidonia Shale,
Toarcian,Paris

Basin.

Green River
Formation, U.S.A.

Stuart
Rundle
Condor

Environment

marine

Joadja. N.S.W.
Newnes
Glen Davis
Alpha, Qld
Carnarvon
Creek, Qld
Lacustrine
freshwater lake
in a lake peat
mire (swamp)

lacustrine

Marine (shallow
sea)

shallow marine

Stratified (saline)
lacustrine

shallow
freshwater
lacustrine

Figure 2: Oil Shale classification based on maceral composition and environment of deposition (after Hutton et al. 1980 & Hutton, 1982).
The Stuart Oil Shale Deposit is classified as a lamalginite dominated lamosite with kerogen precursors related to the present-day blue-green algae Pediastrum.

10


Tissot & Welte (1978) proposed the use of a diagram using H/C and O/C atomic
ratios, pioneered by Van Krevelen to characterise coals and their evolution paths on
progressive burial, as a useful indicator of kerogen type and their maturation path.
The three basic types of kerogen are distinguished by their differing atomic ratios
(Tissot et al, 1974), and to some extent these can be used to indicate depositional
environment and algal precursors (Figure 3). In this instance whole rock samples
from Stuart fall into the Type I and Type II evolution paths. The more vitrinite
dominated and mixed oil shales from the uppermost portion of The Narrows Graben
(the Curlew Formation) tend to plot in the Type III or Type II evolution paths
respectively. (Generally the H/C ratios of Type II are indicative of a marine origin
but mixed lacustrine do exhibit similar ratios).

Detailed work on the role of cyanobacterial mats as contributors to the organic
inventory of sedimentary environments and studies on the organic matter and its
relationship to diagenesis highlights the importance of algal precursors and the nature
and degree of depositional environment and diagenetic change in the preservation

and degradation of organic matter in sediments (Bauld, 1981, Philip, 1981).
Although pervasive anoxic conditions such as those found in anoxic lakes can
provide a favourable environment for organic matter deposition (Demaison &
Moore, 1980), conditions such as sedimentation rate, preservation, water chemistry,
climate and time windows are equally important contributors (Kelts, 1988).

The earliest oil shales of the geologic record are distinguished by the dominance of
Type I kerogens, or those rich in hydrogen primarily due to their algal origin and
where the bulk of the volatile components are released at temperatures above 500oC.
Rocks rich in algal organic matter constitute prime source material for oil generation.
Higher plant material, the Type III kerogens with atomic hydrogen to carbon ratios
less than about 1.35, lack the significant volatile components generated above 500oC.
Input of Type III kerogens became more significant from the Silurian. Although
they are a source for some oils, rocks bearing this type of organic matter are
generally considered as source material for gas generation on burial.

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2.0

Stuart Type I Kerogen
ing
eas
Incr

l
buria

I

1.5

II

Atomic Ratio H/C

urial
sing b
Increa

Stuart Type III Kerogen
1.0

III
urial
sing b
Increa

0.5

0.0
0.0

0.1

0.2

0.3

Atomic Ratio O/C
KEROGEN TYPES AND EVOLUTION PATHS
Green River Formation (Paleocene-Eocene) Uinta Basin USA
Algal kerogens (Botryococcus etc) Various oil shales

I

Narrows Graben Kerogens (Stuart filled, Rundle unfilled symbol)
Lower Toarcian shales, Paris Basin
Silurian shales, Sahara, Algeria & Libya

II

Various oil shales
Late Cretaceous, Douala, Cameroon
Lower Manville shales, Alberta, Canada

III

Figure 3: Principal types an devolution paths of kerogen types I, II and III.
Changes in the atomic ratios H/C and O/C show the change in kerogen composition during
increasing burial (modified after Tissot and Welte, 1978, Stuart and Rundle data from Crisp, et
al 1987 & Southern Pacific Petroleum NL, unpublished data)

12


Oil shales are found in both marine and fresh water settings, as both are capable of
providing an environment appropriate to the preservation of algal matter. The
marine setting is generally host to algal remains, whereas some of the lacustrine

settings provide an environment where algal, higher plant and spore/pollen material
can be preserved in the one system. Organic matter can accumulate in both
carbonate and silicic dominated sequences. Despite the depositional setting having
an initial influence on the preservation of organic matter and its thermal evolution,
the composition of the host mineral matter plays a major role during the migration
and entrapment of any hydrocarbon generated on burial. There is adsorption of
hydrocarbons dependent on the surface area of the argillaceous minerals in the
matrix, and on clay minerals in particular (Hartman-Stroup, 1987). The nature of the
host sediment is also critical from mining, processing and materials handling point of
view should the oil shale be used directly to produce oil by pyrolysis.

It has long been appreciated that oil shales containing mixed kerogen types preserved
in lacustrine environments are capable of generating both oil and gas on increasing
depth of burial. With increasing depth of burial, kerogens initially loose oxygen with
the breakdown of heteroatomic bonds followed by the progressive breakdown of
carbon chains and thermal cracking with increasing temperature and pressure (Figure
4a). The changes in the H/C and O/C ratios can be mapped and the zones of oil and
gas generation determined (Figure 4b).

As a consequence, there has been a renewed appreciation of the environmental,
structural and climatological settings of these rocks in lacustrine settings following
the association with an increasing number of recently discovered commercial oil and
gas fields (Katz, 1990, Smith, 1990). Where the degree of burial and maturation has
been insufficient to generate oil and gas these sediments host some of the thickest
and moderately rich oil shales known in the world.

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Figure 4: General scheme of hydrocarbon formation and kerogen evolution as a function of

burial.
4a (top) -The evolution of hydrocarbon formation is shown in insets for three structural
types. Depths are only indicative and correspond to an average on Mesozoic and Palaeozoic
source rocks. Actual depths vary according to varying geological conditions.
4b (bottom) - The successive evolution stages and principal products are indicated on a van
Krevelen diagram (from Tissot and Welte,1978).

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OIL SHALES IN AUSTRALIA
Earliest reports of oil from Precambrian rocks have included the Middle Proterozoic
black shales of the Battern Subgroup and Umbolooga Subgroup from the McArthur
River Basin, in the Northern Territory. These sequences developed partly in
lacustrine environments developed in half-rift lake complexes and are more widely
known as host to the McArthur Pb-Zn deposits (Womer, 1986, Plumb et al. 1990,
Swarbrick, 1974).

The oil shale (torbanite) deposits of the Sydney Basin are found associated with the
Permian Illawarra Coal Measures. These deposits developed in short-lived fresh to
brackish, lakes where algal growth flourished. The kerogens are dominated by
Botryococcus related algal matter. These torbanite layers are thin (1.5 metres
maximum) but due to the high lipid content of Botryococcus can be exceptionally
rich which makes up for their limited lateral extent. Similar deposits of torbanites
are found at the Alpha deposit in the Permian Colinlea Formation of the Galilee
Basin in Queensland (Madre, 1986).

The accumulation of sediments in lacustrine systems continued into the Mesozoic in
Australia particularly in the intracratonic basins on the east of the continent. Perhaps
the most extensive of the Australian oil shales are those of the Cretaceous Toolebuc

Formation in the northern Eromanga Basin and the southern Carpentaria Basin more
commonly referred to as the Julia Creek oil shale. However, these shales are marine
rather than lacustrine and were deposited in the more protected areas of an
epicontinental sea during an Early Cretaceous (Albian) marine incursion from the
north (McMinn & Burger, 1986). The organic matter of the Toolebuc shales consists
mainly of bituminite and micrinite with lesser liptodetrinite, lamalginite, telalginite
and inertodetrinite (Saxby, 1986).

The Tertiary saw the accumulation of a number of oil shale deposits in half-grabens
developed in eastern Queensland as a response to the tensional regime initiated
during the opening of the Tasman Sea in the Late Cretaceous (Grimes, 1980). This
regime continued into the early Tertiary with the opening of the Coral Sea to the
northeast. The later phases of the movement associated with the formation of the
Tasman Sea introduced a preference for a strike-slip movement that in some
15