International Endowment Oil & Gas prospects for countries in Arctic region

Attention of the oil and gas sector was attracted to the Arctic region long ago due to its significant hydrocarbon reserves – their share in the world unexplored recoverable resources of oil and gas can reach 20 percent. According to estimates of the US Geological Survey (USGS), non-discovered hydrocarbon reserves in the Arctic region include approximately 90 billion barrels of oil, 47 trillion cubic meters of natural gas and 44 billion barrels of gas condensate; 84 percent of 412 billion barrels of oil equivalent (BOE) falls on the continental arctic shelf. As compared to the world reserves, the arctic basins contain approximately 13 percent of the non-discovered oil reserves and up to 30 percent of the non-discovered reserves of gas. Prospects of hydrocarbon pools in the Arctic region were known long ago, but only over the last years, development of fields located north of the Arctic Circle became technically and economically feasible with regard to current and predicted oil prices.

Cursorily Over Europe and Farther

The Arctic region is divided among the eight countries: USA, Canada, Denmark (Greenland), Finland, Iceland, Norway, Sweden and Russia. According to data of the auditing company EY (Ernst & Young), up to date, 61 large oil and gas fields have been discovered north of the Arctic Circle, 43 of which are located on the territory of Russia, 11 in Canada, six in Alaska (USA), and one field is in Norway. More than half of the total hydrocarbon reserves of the Arctic region are located on the territory of Russia, where the largest reserves of natural gas are accumulated, and the largest oil reserves fall on the U.S. territory (see Fig. 1). Thus, there are five players in the Arctic region, including Greenland, the Arctic sector of which, in the opinion of experts, has great potential.

Russia

According to the EY study “Oil and Gas of the Arctic Region”, the area of the shelf and continental slope of Russia is 6.2 million sq. kilometers, and a significant portion of this area falls on the Arctic region. This territory can increase by 1.2 million sq. kilometers in the event the UNO approves the request of Russia for extension of its external border in the Arctic region; Russia is planning to submit this request for consideration in 2014. The Lomonosov underwater ridge in the Arctic Ocean is the desired object for which Russia is competing, and, according to the State Duma vice-speaker Arthur Chilingarov, this area “must” be within the contested Arctic territory. Researchers and experts evaluate the Lomonosov ridge as extremely promising – almost 25 percent of the world hydrocarbon reserves are located there, which makes it a “sweet spot” for other countries, including Denmark, Canada and the USA.

For Russia, the Arctic offshore is a strategically significant region for development of the oil and gas sector, due to decline of production in large, but already old oil and gas producing centers of the country, with mature producing fields. To compensate this decline, now Russia has turned