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R ising crude oil prices motivate not only techno- logical innovators to explore cheaper alternative energy sources, such as solar panels and wind tur- bines, but also upstream oil and gas companies to explore new oil reserves which had not otherwise been economical. While the exact amount is less certain than highly devel- oped areas, such as the North Sea or the Gulf of Mexico, the United States Geological Survey (USGS) estimated in 2008 that the Arctic contained about 412 billion barrels of undiscovered oil and oil equivalent. The Arctic Circle area, in particular, has approximately 90 billion barrels of undiscovered but technically recov- erable oil, 1,670 trillion cubic feet of technically recover- able natural gas, and 44 billion barrels of technically re- coverable natural gas liquids. To put these amounts into context, they account for about 22 percent of the ‘not yet discovered but recoverable’ resources in the world. Drill- ing down into these fi gures, lying in the Arctic zone is one third of the world’s undiscovered but potentially recover- able natural gas reserves. With improvements in drilling technologies and weather monitoring systems, offshore shelf drilling operations in the Arctic Circle have become increasingly attractive to upstream oil and gas companies and their investors. USGS estimates that about 84 percent of these resources are offshore. Melting Ice = Accessible Assets In addition to technological advancements in identify- ing oil and gas pockets and new drilling methods, such as multilateral drilling, the declining ice extent in the Arctic Sea has enabled the exploration for minerals. An unprec- edented amount of the Arctic ice melted in 2007, surpass- ing the previous record low ice in 2005 by 24 percent. Another record ice-melt was observed in the summer of 2012, leaving the Northwest Passage navigable. The next record low ice is expected to occur in 2015 or 2016. These fi ndings signify that Mobile Offshore Drilling Units (MO- DUs) will be able to undertake voyages to areas previously inaccessible, and drilling contractors will also have longer drilling seasons. MatthewsDaniel Weather monitors melting ice in the Kara Sea and the Chukchi Sea to calculate an estimated be- ginning and ending date for offshore drilling seasons. The Kara Sea (‘??´????? ??´??’ in Russian) forms part of the Arctic Ocean north of Siberia and has a mean water depth of 110 meters (360 feet). Although the sea is ice-bound for about ten months of the year, a signifi cant amount of untouched petroleum and natural gas reserves lie in the East-Prinovozemelsky fi eld, an extension of the West Si- berian Oil Basin. Estimated recoverable resources in East Prinovozemelsky Blocks 1, 2 and 3 are almost 21 billion tons of oil equivalent. The Chukchi Sea (‘????´????? ??´??’ in Russian), on the other hand, is a marginal sea of the Arctic Ocean and is bounded on the west by the De Long Strait, off Wrangel Is- land, and in the east by Point Barrow, Alaska. About 56 per- cent of its total area has a water depth of less than 50 meters (164 feet), and the sea is open (navigable) about three and a half months of the year on average. The oil and gas reserve in the Chukchi Sea is estimated to be as high as 30 billion bar- rels of oil and gas. Several oil companies have been bidding for extraction rights, for around US$2.6 billion. Science Supports Seasonal Drilling MatthewsDaniel Weather analyzed signifi cant wave data in both the Kara and Chukchi Seas over three time periods: An open Arctic and its impact on drilling William Cho, Head of MatthewsDaniel Weather, a division of the Bureau Veritas Group, explains why improvements in drilling technologies and weather monitor- ing systems have made offshore shelf drilling operations in the Arctic Circle in- creasingly attractive to upstream oil and gas companies and their investors. By William Cho ARCTIC OPERATIONS November 2014 58 MN MN Nov14 Layout 50-65.indd 58 10/23/2014 10:39:48 AM
