Attention has turned to the Arctic as the most promising area for new petroleum development. Feeding this enthusiasm are estimates from the US Geological Survey's Circum-Arctic Oil and Gas Resource Appraisal.
How much oil and gas are in the Arctic? The answer to this question is two-fold. First is what has already been found (discovered resources); second is our best estimate of what we think we will find in the future (undiscovered resources).
Discovered resources in the Arctic
The Arctic holds 15 percent of the world's known oil and gas. To date, some 130 billion barrels of oil and 1500 trillion cubic feet of gas have been discovered in this region. Combined, this equates to 400 billion barrels of oil equivalent. (Oil equivalents are used to collectively describe oil, gas and condensate.)
Most of the Arctic's known resources are in Russia. In total, Russia holds 95 billion barrels of oil and 1390 trillion cubic feet of gas. This gives Russia a commanding 72 percent share of the oil and 91 percent of the gas that have been found throughout the Arctic (see Fig. 1).
Undiscovered resources
Much of the Arctic remains unexplored. Geologists expect much more petroleum will be found as exploration continues in the Arctic. They base their optimism on the presence of geological features known to be favourable for containing hydrocarbons, as well as the amount of hydrocarbons already found in the Arctic.
How much more oil and gas are likely to be found? And where will it likely be found?
The United States Geological Survey (USGS) has laboured for some years to answer these questions. In late 2008, the USGS completed an assessment of potential undiscovered, technically recoverable petroleum resources in the Arctic. This Circum-Arctic Oil and Gas Resource Appraisal is a collection of assessments of 33 geological provinces lying above the Arctic Circle (66 34 North latitude).
Using a geology-based probabilistic methodology, the USGS estimated that 90 billion barrels of oil, 1670 trillion cubic feet of gas, and 44 billion barrels of natural gas liquids remain to be found in the area above the Arctic Circle. In total, this equates to 412 billion barrels of oil equivalentÑslightly more than what has already been discovered in the Arctic to date.
Natural gas comprises two-thirds of the Arctic's undiscovered petroleum. According to the USGS study, more than 70 percent of the undiscovered natural gas is thought to occur in just three provinces: the West Siberian Basin, the East Barents Basins, and Arctic Alaska (see WSB, EBB, and AA in Fig. 2).
Undiscovered oil in the Arctic is thought to be more widely distributed. More than 70 percent is thought to occur in five provinces: Arctic Alaska, Amerasia Basin, East Greenland Rift Basins, West Greenland-East Canada, and the East Barents Basins (see AA, AM, EGR, WGEC, and EBB in Fig. 3).
In reaching these results, the USGS quantitatively assessed 25 geological provinces in the Arctic where they believed there was at least a 10 percent chance of discovering at least 50 million barrels of oil equivalent. The remaining provinces were not assessed since the likelihood of discovery was below this limit.
Offshore - the next frontier
So far, almost all petroleum production in the Arctic has been on land. Yet, the oceans comprise nearly two-thirds of the area above the Arctic Circle. Most of this offshore area is unexplored with respect to petroleum.
According to the USGS study, 84 percent of the Arctic's undiscovered oil and gas is expected to lie offshore, predominantly within the continental shelf areas under water less than 500 meters deep. Thus the Arctic's extensive continental shelves may constitute the geographically largest unexplored prospective area for petroleum remaining on Earth.
Offshore production in the Arctic began with the Sn¿hvit gas field in the Barents Sea. This is expected to be followed by the Prirazlomnoe oil field in the Pechora Sea in 2011, and later by the Shtokman gas field in the Barents Sea.
Offshore production will gradually take over as the existing land-based fields are depleted. The time perspective for developing the Arctic shelf remains uncertain. A variety of factors are at play, including the potentially lower cost of developing fields in other locations, market needs, offshore expertise, and transport.
Uncertainty
The USGS figures are educated estimates. The Geological Survey itself points out that they contain considerable uncertainty. Actual amounts of oil and gas in the Arctic could be far more or far less.
Indeed, estimates of resource potential in the Arctic contain greater uncertainty than estimates for other parts of the world. This is because the region is largely unexplored, and geologists have limited assessment techniques in unexplored basins.
Nevertheless, the USGS estimates do help in considering the region's potential and can guide companies in deciding where exploration activity is most likely to succeed. Resource estimates will continue to be refined as we learn more and more about the Arctic.