Arctic Brimming With 90 Billion Barrels Of Oil
Posted on: Thursday, 24 July 2008, 15:15 CDT
The U.S. Geological Survey said the Arctic may be brimming with 90 billion barrels of oil, more than all the known reserves of Nigeria, Kazakhstan and Mexico combined, and enough to supply U.S. demand for 12 years.
The agency said one-third of the undiscovered oil is in Alaskan territory. A study released Thursday found by contrast; a geologic formation beneath the North Pole claimed by Russian scientists last year probably holds just 1.2 percent of the Arctic's crude.
Energy giants Royal Dutch Shell Plc and Chevron Corp. have increased exploration of the northernmost regions for untapped reserves. The move comes amid record prices and receding access to deposits in more hospitable climates.
Russia's move to ignore a United Nations convention and take over an exclusive Arctic zone sparked protests from Canada, the U.S., Norway and Denmark.
Donald Gautier, the project chief for the assessment said, “Most of the Arctic, especially offshore, is essentially unexplored with respect to petroleum.''
“The extensive Arctic continental shelves may constitute the geographically largest unexplored prospective area for petroleum remaining on Earth,'' he said.
The U.S. study did not say exactly how long it would take to bring the reserves to markets.
Offshore fields in the Gulf of Mexico and West Africa can take ten years or more to begin pumping oil.
The geologists studied 8.2 million square miles of subterranean rock formations above the Arctic Circle to find areas with characteristics similar to oil and gas finds in other parts of the world.
Gautier said, the study also took into account the age, depth and shape of rock formations in judging whether they are likely to contain oil. He warned seismic data doesn't yet exist for most of the Arctic.
“Petroleum doesn't just occur anywhere,'' Gautier said. “It requires a very narrow set of burial conditions.''
U.S. oil executives such as Exxon Mobil Corp.'s Rex Tillerson and Chevron Corp.'s David O'Reilly have encouraged Congress to relax offshore drilling laws, which includes much of Alaska.
Democratic leaders in both houses of Congress turned down President George W. Bush's offer on July 14 to end a 25-year moratorium on drilling in most coastal waters.
Scientists believe the region above the Arctic Circle also holds an estimated 1,669 trillion cubic feet of natural gas. That equals 27 percent of the world's known gas reserves, according to the study. Almost 40 percent of the gas reserves are in Russia's West Siberia Basin.
The report concluded, about 84 percent of the oil and gas reserves probably lie offshore. The region also has an estimated 44 billion barrels of natural-gas-liquids such as propane and butane, which are used by chemical producers, oil refiners and for home heating.
The study encompassed all areas north of 66.56 degrees north latitude and only included reserves that could be tapped using existing techniques.
Experimental or unconventional prospects such as oil shale, gas hydrates and coal-bed methane weren't included in the assessment.
No Russian institutions took part in the study. But there were a wide variety of data contributors including the Geological Survey of Canada, the U.S. Interior Department's Minerals Management Service, the Norwegian Petroleum Directorate, the Cambridge Arctic Shelf Program and researchers in Denmark and Greenland.
Exxon Mobil, Shell, Gazprom OAO and other energy producers have already found 400 oil and gas fields that hold the equivalent of 240 billion barrels. But this recent survey only applied to undiscovered reserves. In total, the undiscovered reserves of oil and gas in today's report amount to 412 billion barrels.
The discoveries remain capped because of either a lack of pipeline or shipping facilities to haul the petroleum to markets.
Crude for September delivery fell $3.98, or 3.1 percent, to $124.44 a barrel on the New York Mercantile Exchange.
Oil climbed 66 percent in the past year on its way to a record $147.27 a barrel on July 11.
This year, global crude demand is expected to rise by 1 percent to 86.85 million barrels a day. The International Energy Agency said in a July 10 report, that the world saw a 1.3 percent increase in 2007.
According to London-based BP, Kazakhstan owns two of the worlds’ biggest oil discoveries of the past three decades, which includes 39.8 billion barrels of crude reserves.
Nigeria's reserves amount to 36.2 billion barrels and Mexico holds 12.2 billion. Russia, the world's largest producer last year, has 79.4 billion barrels of oil reserves and 1,577 trillion cubic feet of gas.
According to the Paris-based IEA, the U.S. is expected to use about 7.39 billion barrels of crude this year.
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Source: redOrbit Staff & Wire Reports
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User Comments (2)
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Posted by Mark on 07/25/2008, 00:41 just 3 years?!?! |
| 1. |
Posted by Mike on 07/24/2008, 19:16 Interesting! |
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