Arctic E&P: Norway And Russia Moving Ahead While The Rest Fall Behind
BMI View: Despite the considerable oil and gas potential of the Arctic, the prohibitively high costs and substantial technical challenges of operating in the US, Canadian and Greenlandic Arctic waters has seen the supermajors reduce their exposure, such that we see limited progress in the development of this acreage. Rather, the specific advantages offered to companies operating in the Barents and Kara Seas suggest we will see the majority of Arctic investment focused on Norwegian and Russia areas over the coming years.
The persistently high oil price environment fuelled a great deal of fervour surrounding the Arctic's offshore potential, with E&P companies hailing the acreage as a crucial future oil and gas frontier. With a US Geological Survey estimating mean undiscovered resources of almost 90bn barrels of oil and 47trn cubic metres (tcm) of gas, the rewards are potentially substantial.
However, we are increasingly witnessing a trend of big oil shying away from offshore Arctic ventures as safety and cost factors trump the benefits.
|Extensive Undiscovered Resources|
|Arctic Countries And Seas|