Exploration for petroleum in the Arctic is expensive and challenging both technically and logistically. In the offshore, sea ice can be a major factor. There have been many discoveries of oil and gas in the several Arctic basins that have seen extensive exploration over past decades but distance from existing infrastructure has often deterred development. Development and production operations in the Arctic offshore as a result of exploration have been limited, with the exception of the Barents and Norwegian seas. In Alaska, exploration subsequent to the discovery of the Prudhoe Bay oilfield has focussed on the onshore and shallow coastal waters. Technological developments such as Arctic class tankers for Liquefied Natural Gas, and climatic changes leading to reduced sea ice, may see a resurgence of interest in the offshore Arctic should high oil and gas prices be sustained and environmental concerns mitigated. Since the onset of the 2010s oil glut in 2014, and, in North America particularly, the widespread development of shale gas and oil depressed prices. Consequently commercial interest in exploring many parts of the Arctic has declined.
Overview There are 19 geological basins making up the Arctic region. Some of these basins have experienced oil and gas exploration, most notably the Alaska North Slope where oil was first produced in 1968 from Prudhoe Bay. However, only half the basins – such as the Beaufort Sea and the West Barents Sea – have been explored. A 2008 United States Geological Survey estimates that areas north of the Arctic Circle have 90 billion barrels of undiscovered, technically recoverable oil (and 44 billion barrels of natural gas liquids ) in 25 geologically defined areas thought to have potential for petroleum. This represents 13% of the undiscovered oil in the world. Of the estimated totals, more than half of the undiscovered oil resources are estimated to occur in just three geologic provinces – Arctic Alaska, the Amerasian Basin, and the East Greenland Rift Basins. More than 70% of the mean undiscovered oil resources is estimated to occur in five provinces: Arctic Alaska, Amerasian Basin, East Greenland Rift Basins, East Barents Basins, and West Greenland–East Canada. It is further estimated that approximately 84% of the undiscovered oil and gas occurs offshore. The USGS did not consider economic factors such as the effects of permanent sea ice or oceanic water depth in its assessment of undiscovered oil and gas resources. This assessment is lower than a 2000 survey, which had included lands south of the arctic circle. A recent study carried out by Wood Mackenzie on the Arctic potential comments that the likely remaining reserves will be 75% natural gas and 25% oil. It highlights four basins that are likely to be the focus of the petroleum industry in the upcoming years: the Kronprins Christian Basin, which is likely to have large reserves, the southwest Greenland basin, due to its proximity to markets, and the more oil-prone basins of Laptev and Baffin Bay.
Canada Drilling in the Canadian Arctic peaked during the 1970s and 1980s, led by such companies as Panarctic Oils Ltd. in the Sverdrup Basin of the Arctic Islands, and by Imperial Oil and Dome Petroleum in the Beaufort Sea-Mackenzie Delta Basin. Drilling continued at declining rates until the early 2000s. In all, some 300,000 km of seismic and 1500 wells were drilled across this vast area. Approximately 1.9 billion barrels (300×10^6 m3) of oil and 32.4 trillion cubic feet (9.2×1011 m3) of natural gas were found in 73 discoveries, mostly in the two basins mentioned above, as well as further south in the Mackenzie Valley. Although certain discoveries proved large, the discovered resources were insufficient to justify development at the time. All the wells which were drilled were plugged and abandoned. Drilling in the Canadian Arctic turned out to be challenging and expensive, particularly in the offshore where drilling required innovative technology. Short operating seasons complicated logistics for companies who had to contend with the additional risk of variable ice conditions. Exploration has demonstrated that several sedimentary basins in the Canadian Arctic are rich in oil and gas. In particular, the Beaufort Sea-Mackenzie Delta Basin has a discovery record for both gas (onshore) and oil and gas (offshore) although the potential beneath the deeper waters of the Beaufort Sea remains unconfirmed by drilling. Discoveries in the Sverdrup Basin made between 1969 and 1971 are principally of gas. The several basins in the eastern Arctic offshore have seen little exploration activity.
Russia In June 2007, a group of Russian geologists returned from a six-week voyage on a nuclear icebreaker 50 Let Pobedy, the expedition called Arktika 2007. They had travelled to the Lomonosov ridge, an underwater shelf going between Russia's remote, inhospitable eastern Arctic Ocean, and Ellesmere Island in Canada where the ridge lies 400m under the ocean surface. According to Russia's media, the geologists returned with the "sensational news" that the Lomonosov ridge was linked to Russian Federation territory, boosting Russia's claim over the oil-and-gas rich triangle. The territory contained 10bn tonnes of gas and oil deposits, the scientists said.
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