Arctic Circle Holds 90b Barrels of Oil

By: CaraTan   Date: 25 July 2008

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July 25 - The US Geological Survey (USGS) reported on July 23 that approximately 90 billion barrels of undiscovered oil lie above the Arctic Circle. The survey, which took four year to complete, indicates that the resources that are technically recoverable might account for as much as 20% of the world’s undiscovered oil and natural gas reserves. The estimated quantity of undiscovered oil in the Arctic region is enough to cater to world demand for three years at the current consumption rate of approximately 86 million barrels a day. The region’s gas reserves are significantly larger, at an estimated 1,670 trillion cubic feet, equals around a third of the world’s known gas reserves.

More than 50% of the undiscovered oil resources are estimated to be contained in three geologic provinces, namely Arctic Alaska (30 billion barrels), the Amerasia Basin (9.7 billion barrels) and the East Greenland Rift Basins (8.9 billion barrels). Over 70% of the undiscovered natural gas is estimated to be in three provinces, namely the West Siberian Basin (651 tcf), the East Barents Basins (318 tcf) and Arctic Alaska (221 tcf), according to the USGS.

The Arctic region has for some time been the center of attention for oil companies targeting undiscovered energy resources. The survey confirms the belief of these oil companies, which have spent billions of dollars on exploration and in trying to obtain the rights to explore the region. Energy companies have already identified over 400 oil and gas fields north of the Arctic Circle. Despite environment concerns raised by several bodies, the forbidding region is looking more inviting than ever to energy companies, given the continued surge in oil prices

Moreover, the Arctic ice has been melting on account of global warming. With the melting of the polar caps, the region is becoming more accessible and several countries, including the US and Russia, have become part of the race to take control over the region’s resources. The findings by the US Geological Survey could accelerate the mad scrabble for the area. However, drilling in the region is significantly challenging and highly expensive, as experienced by oil companies already operating here for around a decade.

 

According to the survey, a large chunk of these undiscovered resources are likely to be found in Russia. If the survey claim holds true, Russia is poised to becoming a dominant player in the global energy industry. However, with Russia curbing foreign investments or making it harder for international oil firms to explore and run operations within their borders, the Arctic area is becoming a promising region for new oil developments.

 

Alternatio Cirqui, EconomyWatch.com

Energy


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