CERA – Cheap oil slows race to tap Arctic supplies

HOUSTON (Reuters) – The collapse of oil prices has slowed efforts to tap vast crude oil and natural gas supplies that lie under the Arctic Ocean but countries like Russia, Canada and Norway are still vying for a potential bounty of energy riches trapped there.

The potential payoff is huge – the U.S. Geological Survey estimates that a quarter of the world’s undiscovered oil and natural gas lies in the Arctic.


But the price tag for drilling wells and sustaining energy extraction in a desolate, uninhabitable winterland is also huge. And with crude oil prices down over $100 a barrel from July’s record highs, some experts are wondering if even giant international oil companies can foot the bill.

Oil prices would have to hit $100/bbl versus recent levels near $35/bbl to justify multibillion-dollar investments, said Timothy Krysiek, an energy expert at Cambridge Energy Research Associates.

“The trouble is in a low price oil and gas environment, can we get out there and extract that at a profit?” Krysiek said, speaking at the CERAWeek conference this week.

Reuters