• 4 minutes Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 7 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 11 minutes Trump Will Win In 2020
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 1 hour Let's shut down dissent like The Conversation in Australia
  • 5 mins Ethanol is the SAVIOR of the Oil Industry, Convenience Store Industry, Automotive Supply Chain Industry and Much More!
  • 2 hours One of the fire satellite pictures showed what look like the fire hit outside the main oil complex. Like it hit storage or pipeline facility. Not big deal.
  • 3 hours Saudi State-of-Art Defense System looking the wrong way. MBS must fire Defense Minister. Oh, MBS is Defense Minister. Forget about it.
  • 1 hour Trump Accidentally Discusses Technology Used In The Border Wall
  • 10 hours Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 9 hours Donald Trump Proposes Harnessing Liberal Tears To Provide Clean Energy
  • 15 hours Drone attacks cause fire at two Saudi Aramco facilities, blaze now under control
  • 8 hours Saudis Confirm a Cruise Missile from Iranian Origin
  • 8 hours Saudis Buying Oil From Iraq
  • 26 mins Hong Kong protesters appeal to Trump for support.
  • 1 day China Faces Economic Collapse
  • 1 day Democrats and Gun Views
Alt Text

World’s Top Oil Trader Sees Oil Prices Weakening This Year

Vitol, the world’s biggest independent…

Alt Text

Can Oil Survive The Looming Economic “Ice Age?”

A wide-spread economic recession is…

Andy Tully

Andy Tully

Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com

More Info

Premium Content

Low Prices Help Arctic Avoid A ‘Gold Rush’ Scenario

The plunging price of oil over the past nine months has forced many if not most energy companies to cut back drastically on spending, especially on projects in Arctic waters, where exploration and drilling are more difficult and expensive. But the Norwegian government says such delays could pay off in the long run.

The list of companies paring back their plans is long, and exploration in the Arctic Ocean north of Western Europe will decline by half in 2015.

One company is Lundin Petroleum of Sweden, which cites the plunge in oil prices for its plans to drill no more than four exploratory wells in the Barents Sea in 2015. Three other European companies – Vienna-based OMV, Germany’s Wintershall AG and Italy’s Eni – are committed to only one exploratory well each this year. In 2014 these companies together drilled 13 such wells, a record. Related: Is Rosneft The Best Buy On The Global Markets?

Meanwhile, Russia’s state-owned Rosneft and Norway’s state-owned Statoil are also drastically reducing plans for immediate investment in Arctic waters. In fact, Statoil has once again postponed any commitment to develop its Johan Castberg oil field in the Barents Sea because the high cost of the project at a time of low oil revenues.

The field is believed to hold between 400 million and 600 million barrels of oil, but would cost an estimated $15 billion to set up new facilities on Norway’s northern coast to develop it. Statoil says a decision on when to begin work on Johan Castberg won’t come any earlier than 2016, maybe 2017.

“We have made significant progress in reducing costs for Johan Castberg,” said Ivar Aasheim, the Statoil executive responsible for sanctioning projects in Norwegian waters. “However, current challenges in relation to costs and oil prices require us to spend more time to ensure that we extract the full benefit of the implemented measures.” Related: Big Changes Needed For Big Oil To Survive

As grim as the news may seem, Norwegian Foreign Minister Boerge Brende says these delays eventually may benefit Arctic oil exploitation by preventing a melee of exploration in an environmentally fragile region.

Brende told an Arctic conference in Oslo on March 12 that the region is heating up faster than most other areas of the Earth because of climate change, and that part of that heating can be attributed to the burning of gas, which emits fully half as much heat-trapping carbon dioxide as coal.

There have been expectations that the Arctic Ocean would soon be open to increased mining, energy exploitation and shipping, Brende said, but they turned out to be too optimistic. “We should be very happy that there was not a‘gold rush,’ ” he told reporters after his address to the Oslo conference. “A‘gold rush’ is not positive, it’s throwing oneself at resources at breakneck speed. Related: The Easy Oil Is Gone So Where Do We Look Now?

“The Arctic is a very vulnerable area where we have to go step by step,” he said, being careful to apply strong environmental rules.

Nevertheless, Brende said, “It is safe to assume that Arctic gas will have its day,” because oil and gas will continue to supply the majority of the world’s energy for the foreseeable future and that the Arctic will continue to be a key source of these fossil fuels.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play