Monday, June 01, 2009

Alaska one of the world's largest remaining prospective areas for oil

by Dorothy Kosich, company news image

The U.S. Geological Survey says about 30% of the world's undiscovered gas and 13% of the world's undiscovered oil may be found in an area north of the Arctic Circle, mainly offshore under less than 500 meters of water.

In a report published Friday in this month's Science Magazine, USGS scientists said, "For better or worse, limited exploration opportunities elsewhere in the world combined with technological advances make the Arctic increasingly attractive for development."

The USGS noted that the Arctic continental shelves "constitute one of the world's largest remaining prospective areas. Until now, remoteness and technical difficulty, coupled with abundant low-cost petroleum, have ensured that little exploration occurred offshore."

The Alaska Platform stands out, the USGS article said, "with more than 31% of mean undiscovered Arctic oil (27.9 BBO [billion barrels of oil]. ...The Alaska Platform is already a well-known petroleum producing area; new discoveries there could maintain the flow of Alaska oil for many years to come."

"Oil discoveries in the other areas could change the economic landscape and the way of life for local inhabitants," the scientists said. "However, the estimated resource is probably not sufficient to shift the world oil balance. Moreover, the estimated oil resources, if found, would not come into production at once but rather be added to reserves and produced incrementally."

"On an energy equivalent basis, we estimate that the Arctic contains more than three times as much undiscovered gas as oil," the USGS said. "The estimated largest undiscovered gas accumulation is almost eight times the estimated size of the largest undiscovered oil accumulation (22.5 BBOE [billion barrels of oil equivalent] versus 2.9 BBO) and therefore more likely to be developed."

Two-thirds of the undiscovered gas is in just four assessment units: South Kara Sea, South Barents Basin, North Barents Basin, and the Alaska Platform, according to the scientists. "The South Kara Sea, the offshore part of the northern West Siberian Basin, contains almost 39% of the undiscovered gas and is the most prospective hydrocarbon province in the Arctic."

"Although substantial amounts of gas may be found in Alaska, Canada, and Greenland, the undiscovered gas resource is concentrated in Russian territory, and its development would reinforce the preeminent strategic resource of that country."

The USGS articles stressed that their estimates do not account for technological or economic risks, "so a substantial fraction of the estimated undiscovered resources may never be produced.

"Development will depend on market conditions, technological innovation, and the sizes of undiscovered accumulations. Moreover, these first estimates are, in many cases, based on very scant geological information, and our understanding of Arctic resources will certainly change as more data becomes available, "the scientists concluded.