Petroleum exploration in the Arctic

The exploration of the Arctic for petroleum is considered to be quite technically challenging. However, recent technological developments, the melting of Arctic permafrost, as well as relatively high oil prices, have allowed for exploration. As a result, the region has received significant interest from the petroleum industry.

Since the onset of the 2010s oil glut in 2014, the commercial interest in Arctic exploration has declined.

Overview

There are 19 geological basins making up the Arctic region. Some of these basins have experienced oil and gas exploration, most notably the Alaska North Slope where oil was first produced in 1968 from Prudhoe Bay. However, only half the basins – such as the Beaufort Sea and the West Barents Sea – have been explored.

A 2008 United States Geological Survey estimates that areas north of the Arctic Circle have 90 billion barrels of undiscovered, technically recoverable oil (and 44 billion barrels of natural gas liquids ) in 25 geologically defined areas thought to have potential for petroleum. This represents 13% of the undiscovered oil in the world. Of the estimated totals, more than half of the undiscovered oil resources are estimated to occur in just three geologic provinces – Arctic Alaska, the Amerasian Basin, and the East Greenland Rift Basins.

More than 70% of the mean undiscovered oil resources is estimated to occur in five provinces: Arctic Alaska, Amerasia Basin, East Greenland Rift Basins, East Barents Basins, and West Greenland–East Canada. It is further estimated that approximately 84% of the undiscovered oil and gas occurs offshore. The USGS did not consider economic factors such as the effects of permanent sea ice or oceanic water depth in its assessment of undiscovered oil and gas resources. This assessment is lower than a 2000 survey, which had included lands south of the arctic circle.

A recent study carried out by Wood Mackenzie on the Arctic potential comments that the likely remaining reserves will be 75% natural gas and 25% oil. It highlights four basins that are likely to be the focus of the petroleum industry in the upcoming years: the Kronprins Christian Basin, which is likely to have large reserves, the southwest Greenland basin, due to its proximity to markets, and the more oil-prone basins of Laptev and Baffin Bay.

Canada

Extensive drilling was done in the Canadian Arctic during the 1970s and 1980s by such companies as Panarctic Oils Ltd., Petro Canada and Dome Petroleum. After 176 wells were drilled at billions of dollars of cost, approximately of oil and of natural gas were found. These discoveries were insufficient to justify development, and all the wells which were drilled were plugged and abandoned.

Drilling in the Canadian Arctic turned out to be expensive and dangerous. The geology of the Canadian Arctic turned out to be far more complex than oil-producing regions like the Gulf of Mexico. It was discovered to be gas prone rather than oil prone (i.e. most of the oil had been transformed into natural gas by geological processes), and most of the reservoirs had been fractured by tectonic activity, allowing most of the petroleum which might at one time have been present to leak out.

Russia

In June 2007, a group of Russian geologists returned from a six-week voyage on a nuclear icebreaker 50 Let Pobedy, the expedition called Arktika 2007. They had travelled to the Lomonosov ridge, an underwater shelf going between Russia's remote, inhospitable eastern Arctic Ocean, and Ellesmere Island in Canada where the ridge lies 400m under the ocean surface.The Northern Continental Shelf of Greenland (Executive Summary)
''Geological Survey of Denmark and Greenland / Ministry of Climate, Energy and Building (Denmark)'', November 2014. Accessed: 15 December 2014. Size: 52 pages in 6MB
UN mirror
/ref>

According to Russia's media, the geologists returned with the "sensational news" that the Lomonosov ridge was linked to Russian Federation territory, boosting Russia's claim over the oil-and-gas rich triangle. The territory contained 10bn tonnes of gas and oil deposits, the scientists said.

Greenland

Greenland is believed by some geologists to have some of the world's largest remaining oil resources. Prospecting is taking place under the auspices of NUNAOIL, a partnership between the Greenland Home Rule Government and the Danish state. U.S. Geological Survey found in 2001 that the waters off north-eastern Greenland, in the Greenland Sea north and south of the Arctic Circle, could contain up to of oil.

Greenland has offered 8 license blocks for tender along its west coast by Baffin Bay. Currently, 7 of those blocks have been bid for by a combination of multinational oil companies and the National Oil Company NUNAOIL. Companies that have participated successfully in the previous license rounds and have formed a partnership for the licenses with NUNAOIL are, DONG Energy, Chevron, ExxonMobil, Husky Energy, Cairn Energy. The area available, known as the West Disko licensing round, is of interest because of its relative accessibility compared to other Arctic basins as the area remains largely free of ice. Also, it has a number of promising geological leads and prospects from the Paleocene era.

United States

Prudhoe Bay Oil Field on Alaska's North Slope is the largest oil field in North America,Prudhoe Bay Fact Sheet
. BP. August 2006. (Adobe Acrobat *.PDF document) The field was discovered on March 12, 1968, by Atlantic Richfield Company (ARCO) and is operated by BP; partners are ExxonMobil and ConocoPhillips.

In September 2012 Shell delayed actual oil drilling in the Chukchi until the following summer due to heavier-than-normal ice and the Arctic Challenger, an oil-spill response vessel, not being ready on time. However, on September 23, Shell began drilling a "top-hole" over its Burger prospect in the Chukchi. And on October 3, Shell began drilling a top-hole over its Sivulliq prospect in the Beaufort Sea, after being notified by the Alaska Eskimo Whaling Commission that drilling could begin.

In September, 2012, Statoil, now Equinor, chose to delay its oil exploration plans at its Amundsen prospect in the Chukchi Sea, about 100 miles northwest of Wainwright, Alaska, by at least one year, to 2015 at the earliest.

In 2012 Conoco planned to drill at its Devil's Paw prospect (part of a 2008 lease buy in the Chukchi Sea 120 miles west of Wainwright) in summer of 2013. This project was later shelved in 2013 after concerns over rig type and federal regulations related to runaway well containment.

October 11, 2012, Dep. Secretary of the Department of the Interior David Hayes stated that support for the permitting process for Arctic offshore petroleum drilling will continue if President Obama stays in office.

Shell, however, announced in September 2015 that it was abandoning exploration "for the foreseeable future" in Alaska, after tests showed disappointing quantities of oil and gas in the area.

On October 4, 2016 Caelus Energy Alaska announced its discovery at Smith Bay could "provide 200,000 barrels per day of light, highly mobile oil".

Norway

Rosneft and Equinor (then Statoil) made the Arctic exploration deal in May 2012. It is the third deal Rosneft has signed in the past month, after Arctic exploration agreements with Italy's Eni and US giant Exxon Mobil. Compared to other Arctic oil states, Norway is probably best equipped for oil spill preparedness in the Arctic.

Environmental concerns

Arctic oil drilling has faced concerns—both in the past, and right now—from countless organizations and governments who cite detrimental environmental consequences for petroleum exploration in the region. For one, in the event of an oil spill, the ramifications on Arctic animals (i.e. Polar Bears, Walruses, Seals) would be calamitous. Secondly, pollution from ships as well as constant noise pollution from drilling, could affect the fragiles ecosystems productivity and may lead to the declining populations. These issues can be extenuated to Indigenous populations who live in the area and rely on such animals as a food source.

In response to these concerns, Greenpeace, independent global campaigning network, have launched the '' Save the Arctic Project'' since the melting Arctic is under threat from oil drilling, industrial fishing and conflict.Save Arctic Project Greenpeace
/ref>

In 2021, the Arctic Environmental Responsibility Index (AERI) was published that ranks 120 oil, gas, and mining companies involved in resource extraction north of the Arctic Circle in Alaska, Canada, Greenland, Finland, Norway, Russia, and Sweden.Overland, I., Bourmistrov, A., Dale, B., Irlbacher‐Fox, S., Juraev, J., Podgaiskii, E., Stammler, F., Tsani, S., Vakulchuk, R. and Wilson, E.C. 2021. The Arctic Environmental Responsibility Index: A method to rank heterogenous extractive industry companies for governance purposes. ''Business Strategy and the Environment''. 30, 1623–1643. https://onlinelibrary.wiley.com/doi/10.1002/bse.2698 The Index measures companies' environmental activities and demonstrates that oil and gas companies are generally ranked higher than mining companies operating in the Arctic.

Geological basins in the Arctic

* North Slope
* Beaufort Sea
* South Arctic Islands
* Franklinian Sendrup
* Baffin Bay
* Labrador Shelf
* Southwest Greenland
* North Greenland
* Kronprins Christian Basin
* West Barents Sea
* East Barents Sea
* North Kara Sea
* South Kara Sea
*Laptev Sea
* East Siberian Sea
* Hope Basin
* North Chukchi Sea
*Pechora Sea

See also

* Arctic cooperation and politics
*Arctic Refuge drilling controversy
* Natural resources of the Arctic
* Pollution in the Arctic Ocean
*Territorial claims in the Arctic

References

External links

*Murray, A. 2006. ''Arctic offers chilly welcome''. E&P, December, 200
"Arctic Video""Assessment of Undiscovered Oil and Gas in the Arctic"
''Science'' 29 May 2009: Vol. 324 no. 5931 pp. 1175–1179

{{Energy in Russia

20th century in the Arctic
21st century in the Arctic
Environment of the Arctic
Industry in the Arctic
Petroleum geology
Oil exploration