Beach Energy (ASX:BPT) will investigate the prospect of harvesting oil from huge algae fields in South Australia.

Under a deal with US technology group General Atomics, Beach will look at using waste water and carbon dioxide from its Copper Basin oil and gas operations, to grow algae capable of being converted into a biofuel.

Beach managing director Reg Nelson believes the technology is revolutionary and has a strong chance of success.

If it is successful, the two companies plan to work towards having one or more commercial scale bio fuels and bio oils plants, of between 1,000 and 2,000 hectares in size, in operation by 2015.

Nelson says that algae is capable of yielding more oil per meter than other rival crops.

Beach Energy’s 2009 net profit was $260 million.