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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Arctic Oil Is Booming Despite Strong Opposition

Arctic oil

Arctic oil and gas drilling is enjoying strong interest—and not just from Russian companies—despite the political rush to transform the world’s energy systems and remove fossil fuels from them.

A new report by Reclaim Finance, an organization that seeks to build a financial sector that will support the energy transition, has found that oil and gas companies had plans to increase their output in the Arctic by 20 percent over the next five years.

“These Arctic ‘expansionists’ – such as Gazprom, Total and ConocoPhillips – have, it is revealed, been backed by hundreds of billions of dollars of support from banks and investors, despite many holding commitments to restrict fossil financing in the region,” the report’s authors wrote.

The nonprofit said it had uncovered some $314 billion in funding for new oil and gas drilling in the Arctic distributed between 2016 and 2020, all from major banks and asset managers, most of whom have already made net-zero commitments.

Among the lenders to Arctic oil and gas, Reclaim Finance listed JP Morgan, which, according to the report, provided $18.6 billion in Arctic oil and gas financing, as well as Barclays, with $13.2 billion, and Citigroup, with $12.2 billion in financing for the oil and gas industry in its Arctic endeavors.

Private equity giants were also on the list with their holdings in the industry. The pack was led by BlackRock, which has holdings of $28.5 billion in companies with Arctic oil and gas operations. BlackRock, whose CEO Larry Fink recently said that a net-zero world is “the shared responsibility of every citizen, corporation, and government,” was followed by Vanguard, which has some $21.6 billion in exposure to oil and gas drillers in the Arctic, and Amundi, with $12.9 billion in oil and gas holdings in companies with Arctic operations.

“The Arctic is a climate bomb, and our research shows that the oil and gas industry is hellbent on setting it off, thus blowing up our chances of avoiding runaway climate breakdown,” the author of the report, Alix Mazounie, said.

“But they are not the only culprits: financial institutions have bankrolled these companies, making a mockery of their own climate commitments. Since the oil & gas tigers won’t change their stripes, the likes of BNP Paribas, BlackRock and JPMorganChase must heed the instruction of the International Energy Agency and cut off the taps.”

By Irina Slav for Oilprice.com


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Leave a comment
  • Mamdouh Salameh on September 23 2021 said:
    No surprise here whatsoever. The global economy runs on oil and gas and will continue to do exactly that well into the future or at least until the last barrel of oil has been extracted.

    Moreover, the global oil and gas industry which is the most profitable industry in the world will always go for areas with potential and the Arctic is estimated to contain 13% of the earth’s oil reserves. Crude oil reserves in the Russian Arctic alone are estimated at 17 billion tons of oil (equivalent to 124.6 billion barrels of oil) while natural gas reserves are estimated at 85 trillion cubic metres (3004 trillion cubic feet) based on current extraction technology according to Russia’s Ministry of Natural Resources. The untapped reserves in the Russian region alone have an estimated value of $35 trillion.

    Furthermore, the return on investments in the Arctic is huge as the likes of Russian oil and gas giants Rosneft, Gazprom and Novateck as well as French Oil supermajor Total and American oil giant ConocPhililps are finding, hence the rush by global investment banks and financial organizations to invest money there.

    Still, the global oil industry is employing the latest technologies to reduce emissions from its operations particularly in the Arctic.

    It is most probable that the very last barrels of oil produced will come from Iraq, Venezuela and the Russian Arctic.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • George Doolittle on September 23 2021 said:
    I imagine with perfect Fall-like weather comes a huge jump in distribution both to the Distribution Center but of course to physical retail in the USA as well.

    That should cause a material jump in GDP but of course pressure the US Federal Reserve to start raising interest rates big time to compensate ahem "non investors in the stock market" ahem.
  • Randy Dremmen on September 24 2021 said:
    Drill baby drill. May your gloves and boots always be new and may your coffee always be fresh. Lots of money to be made in this new oil boom. Let’s get to work.

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