First oil
While American politicians in Washington continue to make a mockery of governance, with their increasingly ridiculous charges about Russians, a more insidious situation is begging for attention in the Arctic. This, too, involves Russia, but the stakes are much higher, involving matters of national security, territorial sovereignty, shipping routes, fishing grounds and extraction of natural resources.
As reported by Fox News last month, two members of the U.S. Congress, Rep. Duncan Hunter (R – Calif.) and Sen. Dan Sullivan (R – Alaska), contend that a battle is emerging for influence in the Arctic, and that Moscow is winning. Now, even in 2015, former President Barack Obama was concerned about Russian intentions while making a trip to the Arctic, but his interest seems to have focused on shipping lanes and fishing rights.
Oil and gas concerns. The significance of Arctic oil and gas potential hasn’t gone overlooked by Hunter and Sullivan. Back in 2008, the U.S. Geological Survey (USGS) released an assessment of Arctic undiscovered, technically recoverable, conventional oil and natural gas resources. In so doing, the USGS estimated undiscovered resources for 25 Arctic sedimentary provinces. Overall, USGS estimated 412.16 Bboe of resources. Among the world’s undiscovered resources, this represents 13% of the oil, 30% of the gas and 20% of the NGLs.
USGS also said that the West Siberian basin and East Barents basin, both in Russian territory, hold 47% of the undiscovered resources, with 94% being natural gas and NGLs. So, it’s not a surprise that the Russians are leading the way in exploring for, and developing, Arctic hydrocarbons. Back in late 2013, Russia’s Gazprom initiated the world’s first Arctic oil production at Prirazlomnoye field, which continues to produce today. The potential in the Arctic Alaska province, by the way, was estimated at 29.96 Bbbl of oil, 221.40 Tcf of gas and 5.90 Bbbl of NGLs.
Meanwhile, the significance of Arctic potential, coupled with Russian initiatives, led the Norwegians in 2010 to strike a border deal in the Barents Sea with Moscow. Yet, there are credible rumors that the Norwegians remain highly wary of Russian intentions in the Arctic, so much so that they drilled a record 14 wells in the region during 2014, including several “to plant the flag” in the southeastern portion of their jurisdiction, near the border with Russia. And this year, plans call for a record-breaking 16 Norwegian Arctic exploration wells, including one by Statoil at the Korpfjell prospect near the Russian border. Korpfjell may hold up to 10 Bboe of resources.
Short-term U.S. strategy. Back in Washington, Rep. Hunter pointed out that the U.S. only has two ice-breaking ships, one of which is not operational. By contrast, Russia has more than 40, with another 11 under construction or planned. Hunter wants funding for six new icebreakers, along with drones to patrol the Arctic. As chairman of the House Subcommittee on Coast Guard and Marine Transportation, Hunter wrote a letter to the White House on Feb. 21, urging President Trump to fix the situation. Interestingly, a day later, the Coast Guard announced the awarding of five contracts to study heavy, polar icebreaker design, with the goal of delivering a new class of ships between 2023 and 2026.
Earlier last month, Sen. Sullivan, as a member of the Senate Armed Services Committee, had urged the Pentagon to make greater efforts to increase U.S. influence in the Arctic. “We’re late to the game,” a frustrated Sullivan told The Washington Free Beacon.
Our latest staff addition. We at World Oil are pleased to welcome Alex Endress to the staff as News Editor. Alex comes to us from IADC, where he spent more than two years handling a variety of writing, editing and interviewing duties for both print and online products. In the short time that he has been with us, Alex already has shown his mettle under deadline conditions, and we look forward to increasingly greater contributions from him in the coming months. 
