There are over 130billion barrels oil equivalent (boe) in already discovered oil, gas and condensate reserves in offshore Arctic and sub-Arctic regions, according to a new study.
Consultancy Infield Systems says that about 114billion comprises offshore gas (86% of total reserves) and around 16billion barrels is oil.
Infield reckons that no less than 99billion boe of these reserves have been located in the Russian offshore Arctic region (not including the sub-Arctic Sakhalin Island area).
Its consultants have identified 147 discovered fields, with only 25 actually producing in the offshore Arctic and sub-Arctic regions.
“With just a further 13 fields either with a firm plan or under development, the bulk of these offshore discovered fields are still many years from development; reflecting that the Arctic region’s offshore oil & gas development is still in its very early stages with much potential for output growth yet to be realised,” said Infield, in its first market report on the region.
“The vast majority of fields, or 101, are classified as ‘possible’ in terms of development status. Therefore many fields are not expected to be developed until the longer term, yet the resource potential in the offshore Arctic is substantial, should the infrastructure requirements be made.”
Capital expenditure in the Arctic region is expected to increase steadily throughout this decade, rising year on year to more than $7billion by 2017.
With significant reserves, Russia is expected to drive expenditure in the region throughout the forecast period, especially in the years 2013-2015, thanks mainly to the Shtokman project and presumably assuming no further slippage with this development.
Shtokman is due onstream in 2016, and, with reserves of more than 24billion boe, will account for a large proportion of Russian Arctic expenditure over the next decade, should this project proceed as scheduled.
Further development of Sakhalin Island and other projects expected to be developed also contribute to Russia’s large share of Capex.
Infield says that Canada may experience a sustained rise in expenditure after 2013, including for activities associated with fields in sub-Arctic offshore Newfoundland, and, should some currently speculative projects proceed, smaller fields in the Canadian Arctic islands will also be affected.
Norway’s Snohvit and Goliat fields in the Barents Sea will contribute to sustained expenditure too. The remaining Arctic regions of Greenland (Denmark) and the US (Alaska) are expected to contribute modestly to development expenditure.
In these regions more expenditure is likely to be concentrated on further exploration. In the US, the Macondo disaster and its outcomes will impact on the timing, level and nature of the Alaska effort.