Beaufort crawl

The oil prize is huge, but recent renewed interest in the northern sea falls far short of being a stampede

ALGARY -Imperial Oil Ltd. and Exxon Mobil Corp. turned heads in the oil industry in July with a nearly $600-million bid that won them a big exploration block in Canada’s Beaufort Sea.

The hefty sum surprised observers. After all, it’s been 17 years since Imperial, Canada’s biggest oil producer and refiner, drilled a well in the icy Arctic waters.
In fact, only one other company, Oklahoma City-based Devon Energy Corp., has ventured back to the Beaufort since the end of the Arctic exploration heyday in the 1970s and 1980s.

“Obviously, we wouldn’t have bid the work program that we did if we didn’t see some long-term exploration potential,” Imperial spokesman Pius Rolheiser said. “But it’s highly exploratory in nature, high-cost, high-risk, and a lot of work needs to be done.”

Record oil prices and growing struggles securing reserves in traditional producing regions have the world’s oil industry starting to gaze north once again. But it’s no stampede yet.

The prize is huge. Previous wells in the Beaufort and Arctic Islands found 25 trillion cubic feet of natural gas and 1.7 billion barrels of oil, according to government figures. Only a tiny fraction was ever produced.

Financial Post (Canada)