New areas could expand Arctic's oily component

By OGJ editors
-- The Arctic, thought to be natural gas-dominant on the basis of limited exploration, could become more oily as more of the region is more fully explored, delegates at the Arctic Technology Conference were told Feb. 7 in Houston.

The oil and gas industry must overcome negative stereotypes and expectations in order to gain access to vast Arctic resources, another speaker said.

Prudhoe Bay field and its satellites on Alaska’s North Slope are the major exceptions to the gas-prone nature of the explored parts of the Arctic, said Marc Blaizot, Total SA senior vice-president, exploration. But virgin Arctic basins cover an area five times the size of Texas, he noted.

More liquids could be found as exploratory drilling moves from the shelves into deeper water, where no drilling has occurred so far, and around the rims of basins where liquids might have been displaced by gas generation as in the case of giant Snohvit field in the Hammerfest basin off Norway, Blaizot said.

The Yamal Peninsula/Kara Sea area off northern Russia, where two supergiant gas fields were discovered in the 1980s, is one area that has basin characteristics similar to those of Hammerfest, he said.

Total’s studies indicate that oil discoveries can be expected both to the north and south around the edges of the Yamal/Kara area, as well as off North America and Greenland, Blaizot said.

When Arctic deepwater drilling commences, it will likely be off North America and could involve two to four operational seasons for staging and single-well costs of $200 million spread over groups of participants, the speakers said.

Industry may be more likely to gain access to Arctic resources if it emphasizes preserving the environment and livelihoods of local populations, said Mark Shrimpton, senior associate, Stantec Consulting Ltd., St. John’s, Newf.

Oil and gas activity is viewed in many areas as a threat, not an opportunity, he said. Shrimpton noted that Newfoundland and Labrador has grown from a bankrupt province in the 1930s to today when 40% of its gross domestic product comes from oil, gas, and mining.

The Arctic has a permanent population of 4 million in five countries whose emphasis is on preserving their environment and livelihoods.

Unless industry trumpets the positive effects of industrial development such as those that have elevated Newfoundland, it faces consequences such as moratoria, long waits to obtain approvals, and limited access, Shrimpton said.

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