Essays on The Ackaringa Oil Discovery Case Study

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The paper "The Ackaringa Oil Discovery" is a great example of a case study on business. According to Link Energy, the company’ s exploration team has discovered massive oil deposits in the Ackaringa Basin of South Australia. Notably, the oil deposits occur in an approximate area of 284,000 acres nearly at the depth of over 8854 meters. The Brisbane Company officials said that the South Australia State was sitting on massive barrels of oil that range from 3.5 billion to 233 billion; this could be the highest ever found oil deposits in Australia.

In fact, analysts note that it could be several times bigger than all oil deposits that have previously been found in Australia. Nevertheless, the deposits have the possibility of turning the country from an oil importer to an oil exporter. According to the independent investment experts, they estimate the deposits as valued at $20 trillion. The company has also spent about $130 million in the Basin. Moreover, apart from these oil deposits, the Basin has a coal deposit whose extraction development is going on at a cost of $3 billion so that the 560-megawatt power plant could be created.

Additionally, the region boasts to produce the highest opal minerals in the world. This discussion will therefore analyze the project and its opportunity cost, assess its effect on Australia in the loanable fund market, on the gross domestic product in development, and after the development stage (Linc Energy 2011). Analysis of Production Possibility Frontier The Production Possibility Frontier (PPF) is a graph that shows how various combinations of amounts of two separate commodities can be in the fixed total amount of a certain factor of production.

Therefore, the Production Possibility Frontier will show a possible maximum amount of one commodity that can be produced in a combination with the other in a fixed factor(s) of production, depending on the existing level of technology. An economy that operates on the PPF will be said to be efficient. This implies that no more outputs of a given product will be produced using same the fixed input without sacrificing the output of the other products. This can be explained by the concept of opportunity cost. The striking feature of Production Possibility Frontier is the Opportunity cost, which is the highest possible cost of the other/alternative product foregone.

This will be explained using the following curve.

References

Bacchi, U (2013), Australia: 'Massive' Multibillion Barrel Oilfield Found by Linc Energy,

International Business Times, viewed 18 October 2013,

Boundless, (2013), Loanable Funds Market, viewed 20 October 2013,

Investopedia, (2013), Microeconomics - Marginal and Average Total Cost Curves, viewed 20

October 2013,

Linc Energy, (2011), Significant Oil Shale Discovery, viewed 18 October 2013,

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