Oil investment and exploration in the Arctic is seen to pick up
For many years now, the world’s oil-rich vast lands have been the major target of companies with interests in oil exploration, but more recently, there are a growing number of firms that would risk tapping remote regions that remain untapped for want of higher returns.
Land areas within the northeastern sections of Beaufort Sea are one of these undeveloped but potentially oil-rich regions. It has not been explored yet by any oil firm, but many already speculate it holds vast oil reserves. Based on geological surveys of the Arctic region, its waters could have 26Bn barrels of oil and over 100 trillion cubic feet of natural gas.
More than 900 thousand hectares of this region are up for bids which, sources say, will extend until September.
ION Geophysical Corporation believes that treacherous conditions in the Arctic region would make it quite challenging to explore, but oil industries certainly see it as a region that could offer “world-class play.”
This is the reason why ION is continuously investing in oil data gathering technology. Back in 2006, it has ventured in a database project that would help record the subsurface underneath the Beaufort Sea. It has equipped itself with seismic tools and gadgets that could scan surfaces and detect presence of oil and natural gas.
ION’s Arctic Solutions & Technology Director Joe Gagliardi disclosed that the company has, so far, invested $150 million for this project, and that their vast oil data is slowly being recognized by regions across the globe.
Apart from the Beaufort Sea, the Alaskan Arctic is another region that oil firms are intently eyeing. Many conclude that its oil resource may be more than enough to produce crude that could make the U.S. realize self-sufficiency in the long term. With these prospects in mind, Royal Dutch Shell has parted with up to $4 billion from 2005-to-date to invest in oil exploration in this remote region.
Experts opine that many oil firms would continue to flood the Arctic region. Its predicted oil yield may reach one million bpd – about one tenth the level of US domestic crude production.
Previous bidding rounds for Beaufont elicited modest bids, but some say that this year’s auction may produce a higher number of offers, due in part to the vast oil data that is now available and modern exploration technology.
Despite these developments, the challenges posed by the Arctic region – its difficult and unpredictable terrain remains. Oil drillers remain optimistic that exploration efforts, despite the hurdles, would pay off in the end.