The Arctic has been touted by many groups as the next big undiscovered resource. But as the Arctic geology becomes more understood, it’s looking less like the next Saudi Arabia and more like a smaller gas province. From Petroleum News, by Gary Park:
The U.S. Geological Survey has made another contribution to the understanding of oil and natural gas resources within the Arctic Circle by releasing an interim assessment of the offshore region between western Greenland and Canada’s Baffin Island.
The so-called West Greenland-East Canada Province is estimated by the USGS to have a mean 7.275 billion barrels of oil, 51.816 trillion cubic feet of gas and 1.152 billion barrels of natural gas liquids. The study said the estimates relate to “undiscovered technically recoverable conventional oil and gas resources” within five assessment units.
As part of the USGS evaluations of various provinces, a study released last year of the East Greenland Rift Basins Province, covering about 130,000 square miles, generated estimates of 9 billion barrels of oil, 86 tcf of gas and 8 billion barrels of gas liquids the USGS rated as technically recoverable in less than 1,640 feet of offshore water in the absence of sea ice. The final overall results are due to be released this summer.
The unit with the greatest potential is the Northwest Greenland Rifted Margin AU, with oil rated at 2.746 billion barrels, gas at 17.8 tcf and gas liquids at almost 400 million barrels.
The growing interest in Greenland gained added momentum earlier in June at a Reuters Global Energy Summit, when Bill Gammell, chief executive officer of Scottish-based Cairn Energy, said the Danish territory could have billions of barrels of oil, but the costs of development would be high, making production a distant prospect.
Cairns, which has stakes in six of the 10 leased blocks off western Greenland, is working on seismic this year and may start drilling in 2009.
ExxonMobil, Chevron, Husky Energy and Sweden’s PAResources also have interests in the region.
Gammell believes exploration will eventually work its way to the east coast, but said “costs will be large, so the size of the prize needs to be big. … There will need to be a lot of wells drilled before you’re successful.”
Additional information can be found at Rigzone, or go straight to the horses mouth at the USGS (news release, report). For additional background discussion, see Peak Oil or David Strahan. Both are not without a distinct bias or agenda, but provide a good overview of the historical and current interest in a future oil province.