Guest Post: Russia Claims New Arctic Hydrocarbon Finds Effectively Double Nations Reserves

Tyler Durden's picture

Submitted by John C.K. Daly of

Russia Claims New Arctic Hydrocarbon Finds Effectively Double Nations Reserves

Russia, currently vying for the title of world's top oil producer with Saudi Arabia, claimed that new findings in its offshore Arctic territories have effectively doubled the nation’s energy reserves.
According to numerous Russian media reports, addressing a meeting of the sixth media forum of the United Russia Party on 25 September, Russian Natural Resources Minister Iury Trutnev said that the preliminary forecast is that resources in the Russian Arctic shelf are comparable to those in mainland Russia, adding, “Speaking of long-term planning, these reserves could last 100, may be 150 years, but longer is unlikely. Humanity will eventually have to look for new energy anyway. Recently, we completed 40-year talks with Norway, delineated the gray zone, and now obtained another 5 billion tons of fuel equivalent there.”
Trutnev’s new Arctic reserve claims are buttressed by the United States Geological Survey (USGS) 2008 survey, which estimated that 90 billion barrels of undiscovered oil and 1.668 trillion cubic feet of undiscovered natural gas lie beneath the Arctic’s waters and ice, representing 13 percent of the world’s undiscovered oil. Strong oil prices, more advanced offshore equipment and receding sea ice are leading to a growing interest in the Arctic.
Four years ago Russia’s Arktika 2007 expedition took a team of Russian geologists on a six-week voyage aboard the 50 Let Pobedy (“50 Years of Victory”) nuclear icebreaker to the underwater Lomonosov ridge in Russia's eastern Arctic Ocean, which they claimed was linked to Russian Federation territory and contained 10 billion tons of natural gas and oil deposits. The Russian Federation has been busily advancing its claims over its Arctic continental shelf ever since. Just to be on the safe side, Russia has prepared a justification for submitting in 2013 a new claim for the expansion of the borders of its Arctic shelf, according to Trutnev, who told media forum participants, "Important work was carried out this year: our vessels covered a distance of 22,000 kilometers and conducted activities to justify Russia's new claim in 2013."
Russian Prime Minister Vladimir Putin has also gotten into the act of national chest-thumping about Russia’s new-found Arctic riches. According to information posted on the Prime Minister’s website, Putin told participants at the second International Arctic Forum, "The Arctic - Territory of Dialogue" in Arkhangelsk on 22 September, “We have already installed one of the world's largest hydrocarbon platforms there. Russia is starting to develop the Arctic shelf and opening a new chapter in the history of Arctic exploration. Very soon it will contain pages on the commissioning of the Shtokman deposit in the Barents Sea and the development of resources in the Kara Sea and on the Yamal Peninsula.”
Seeking to allay the not inconsiderable environmental concerns about the Arctic’s fragile ecosystems Putin added, “All our plans will be carried out in compliance with the toughest environmental standards. A careful, civilized attitude to nature is a requirement of all development programs. Active economic development of the Arctic will be beneficial only if we maintain a rational balance between economic interests and environmental protection for the long term, not just for 10, 15 or 20 years. I mentioned the Prirazlomnoe deposit, where oil production is expected to last for at least 25 years and, hence, environmental support must be provided for this entire period. The Shtokman deposit is expected to last for 50 years.”
Just coincidently, during the Forum Putin fielded a telephone call from Rosneft president Eduard Khudainatov, who just happened to be standing on its Prirazlomnoe offshore platform in the Pechora Sea. Via sat-phone hookup Khudainatov addressed environmental safety concerns by telling Putin, "We know absolutely how to do this. We have started this work and we are absolutely certain that the risk in Arctic shelf exploration will be ruled out."
Whether of not the Russians have either the expertise or the necessary cash to exploit the region’s reserves is another matter, as Arctic oil and natural gas exploration is more technically and physically challenging than for any other environment. However, Putin added that Rosneft has a long strategic cooperation agreement with ExxonMobil, and no doubt there will be other international energy companies willing to brave Russia’s tortuous bureaucratic maze for a piece of the action.
In the early 2012 Russia plans to start the first commercial offshore oil drilling in the Arctic on its Prirazlomnoe offshore platform, hailed in the Russian media as the world’s first Arctic-class ice-resistant oil rig.
Oh, and if things do screw up in spite of Khudainatov’s promises, well, according to Russian Transport Minister Igor Levitin, addressing the same forum as Putin, the Russian government has allocated 20 billion rubles ($623 million) to construct three new nuclear and three diesel-electric icebreakers.

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Smithovsky's picture

Take everything they say with a big grain of salt.

And three shots of vodka.  

Ahmeexnal's picture

But...but...TRAV7777 said peak oil was here!!

What a fucktard!

topcallingtroll's picture

It is here. We will never go over 90 million barrels of crude daily.

Thank god for a long, long plateau, plus trillions of cubic feet more natural gas than expected.

We will muddle through with civilization intact.

redpill's picture

In Mother Russia, Milkshake drinks YOU!!

Haddock's picture

We now control all your base.

Hephasteus's picture

Can never control all your base. Can only debase your base.

Bicycle Repairman's picture

LOL.  I wonder how many dinosaurs lived in the arctic ocean and then ended up under the seabed.  Oh that's right abiotic oil is a "crazy" Russian conspiracy theory.  Those communists are such liars.  LOL. There's no oil there.  Anyway the arctic is ours.  How dare they lie about phony oil that's ours?  Even if the oil is there, then peak oil becomes a oil plateau, which will be even more devastating.  LOL.

Like you guys even knew that oil was there.  Time to gas up the SUV. LOL. Go back to the oil drum you freaking clowns.  ROTFLMAO.

optimator's picture

Thanks for reminding me to have a nice white, or maybe black, Russian.

Clorox Cowboy's picture

Sadly you're incorrect.  Plateau is good while it lasts, but even more devestating once it ends.  It prolongs extraction at rates that are unsustainable and when the downslope of production arrives, it will be steeper than if we had seen a "clean" peak.  Sort of like the debt crisis we're witnessing now...each effort to preserve status quo only adds more future misery.

Also, each time we see demand destruction due to high prices in the oil market, a portion of that demand does not recover.  Less demand = lower future price peaks = less incentive to extract the expensive oil (arctic, deep-water, oil sands, shale, etc) = a shorter plateau, not a longer one as you assume.

From where I stand, civilization (as we know it) is unsustainable and will not make it through the next 25 years intact.  Not sure what the future looks like, but I am 98% certain it will be much more unpleasant than today.

topcallingtroll's picture

My investment time frame is thirty years for me and my kids. Civilization just has to last long enough so that we are lords, not serfs!

Clorox Cowboy's picture

Sure, civilization will probably be here in 30 years, you'll just need to adjust your definition of what is "civilized".  

"Investments" will probably not be here in 30 years, at least if you're talking about the average person participating in financial markets, as that type of investment requires a higher level of civilization to operate.  Your children will likely BE your investment in 30 years, since you will depend on their manual labor for basic survival.

topcallingtroll's picture


Not if we are holding a couple of large, landed estates. Manual labor is for the little people.

Hey what was that rule called where the manor lord got to fuck all the brides of the village people?

tonyw's picture

Droit du seigneur

From wikipedia: an alleged legal right allowing the lord of a medieval estate to take the virginity of his serfs' maiden daughters. There is no historical evidence for such a right ever having existed.


Of course if you are the manor lord then you don't really need the right, they'll come to you out of their own free will, but surely you should already know that or are you having a few problems in that area:-)


topcallingtroll's picture


Yes I know they will gladly sell me their daughters for permanent employment in my fields.

Just trying to annoy the plebes. I am a troll!

Shirley Wilfahrt's picture

Apparently such a shitty one that you actually have to tell folks that you are a troll....


That's not trolling....that is simply being an inane douchebag.


Rynak's picture

He may say that he's trolling "now", but his mindset actually isn't the slightest bit different, than is "normal" for him - except of perhaps, that he's using less sugar now.

bid the soldiers shoot's picture

and what evidence would you be referring to? bloody sheets? used condoms with the family crest printed on the tip?

the droit du seigneur applied only to one night i.e. the bride's wedding night. seigneurs don't like 'sloppy seconds'

Are you kidding's picture

Do you remember what happened to him AFTER?

Gold Man-Sacks's picture

I just love you "experts" who "know" how much oil is INSIDE the Earth.  Just like with the idiotic Global Warming nonsense, you arrogant pricks think you're just so omniscient.  What exactly are your credentials, Mr. Clorox Cowboy?  Daily reads of the Huffington Post does not qualify as all-knowing, ummmm-k?

Clorox Cowboy's picture

I don't know how much oil is inside the Earth, but you missed my point.  It doesn't matter if there's oil underneath the arctic or a mile under the sea...there could be trillions of barrels down there and it wouldn't matter, because the economy obviously will not support the prices that would be required to profitably extract it.  We've found all the easy, cheap oil and most of it is in Saudi Arabia.  This new find in Russia is a pipe dream because no consumer will be able to afford to buy it.  It's too expensive.

Bringin It's picture

Cowboy - tell him to google EROI.

Bicycle Repairman's picture

And just how do you know if it will be too expensive to bring to the surface?  What percentage of that cost makes up the final cost of a gallon of gas?  Which is a bigger percentage, actually producing the oil or banker/speculator skim?

Gold Man-Sacks's picture

I get your points on EROI.  I just think it's incorrect.  Look at what fracking has done to NG prices.  My point is you don't know the future.  You don't know what new discoveries will be found, both in reserves and technologies.

bid the soldiers shoot's picture

if you don't know what new discoveries of reserves and technologies to expect, and you are POTUS or Chairman of the Fed how do plan for the next year and the year after that? POTUS probably has more facts into the available proven reserves than anyone alive. should he poll the sheeple to make his decisions?

don't POTUS and Bernanke have to make their decisions based on the the worst case and not the best case senarios?

trav7777's picture

You'd be hard-pressed to write a more stupid rebuttal than that.

You fuckin retards still talking about reserves when they are irrelevant.  And you think you have something to say about Peak Oil?  The sheer audacity of your arrogance astounds me.

Gold Man-Sacks's picture

Your limited cranial capacity easily explains your astoundedness.


Sophist Economicus's picture

I'm shocked that many dinosaurs lived in the arctic to create such a pool of 'fossil fuels'. ;)

trav7777's picture

you're not quite stupid enough to believe oil comes from dinosaurs or other large animals, are you?

Sophist Economicus's picture

Uhmm, this symbol. " ;) " is a wink, which in the above situation mean 'said in jest'

Come on trav, lighten up

Gold Man-Sacks's picture

Don't take in personally.  Peak Oil has made it too expensive for Trav to afford Vaseline.  Chafing, you know.

mophead's picture

"I'm shocked that many dinosaurs lived in the arctic to create such a pool of 'fossil fuels'. ;)"

Yup. Don't forget there were 57 quadrillion gnats there too. Lies, damn lies, then peak oil.

bid the soldiers shoot's picture

before the earth's axis shifted the Arctic was a little bit like Miami Beach.
:o )

Thunderlips's picture

Know where antarctica was 500 Million years ago?  Not near the South Pole.

How about the Arctic?  Millions of years ago, it was warm and lush:


Geography and Climate changes without humans.

trav7777's picture

you're is impossible to be able to fully comprehend the depths of your stupidity

TravsMom's picture

Are you looking at your mirror again?

Bicycle Repairman's picture

When was the first time you heard of fracking or the abundance of natural gas in the USA?  You have no idea at all where undiscovered reserves are or how they'll be retrieved.  You and the other oil drum idiots had no idea about this oil two years ago.

dirtbagger's picture

Chlorox -

Don't you understand the concept of product substitution when price increases?  At some price point there will be energy substitution, likely resulting in less activity requiring energy input.   I came to this urealization last night as I was washing down my Alpo with Gallo wine

bid the soldiers shoot's picture

two things.  the right side of the peak oil graph will not look  like the right side of a bell curve graph new production and improvement in extraction technology will counter the loss from existing wells.

When the pentagon 'guestimate' of how much reserves we have reaches the red line of what the military wants, who know that there won't be rationing. 

Gold Man-Sacks's picture

Priced in gold, oil's cheaper than back in the early 60s.  Do some homework, tard.

iNull's picture

The only barrier to accepting peak oil is psychological. Namely, denial. People simply cannot accept, will not accept, that when you have a finite amount of resources and a population that is growing exponentially consuming those resources, then the resources will peak and eventually either run out or be too cost ineffective to extract. Which BTW is what you do with resources, you extract them, you do not "produce" them which is why the term oil production is a misnomer.

This debate is so old it's surprising that we still keep having it. Oil peaked worldwide in 2006. There is no longer any debate about that from the scientific or engineering community or the world's largest energy agencies. It's behind us. We're past it. Case closed.

We can however debate the length of the plateau and the cumulative energy area map and what resources will take the place of oil, e.g., coal or natural gas. But as for PO, only religious crackpots and oil company PR people (like Exxon) are still in denial about that. Everyone else has moved on.

Bicycle Repairman's picture

Apparently the Russians are also in denial.  Go tell Putin to start reading the oil drum.

Baptiste Say's picture

"It is here. We will never go over 90 million barrels of crude daily."




Given demand is somewhere in the low 85 million barrels per day why would you expect us to go beyond 90 mbbl per day?

Clorox Cowboy's picture

It's not about total supply of oil in the's how much can be extracted and at what price.

Peak (cheap) oil arrived several years ago.  These new finds will be expensive to extract and as we've seen twice (2007 and 2011), the world economy cannot handle oil prices at the levels necessary to make arctic drilling an attractive investment.

mcguire's picture

well, not according to this, where global warming and melting of the artic ice cap makes it easy to extract... lemonade from lemons...  it might be waterworld, but the price of oil extraction will go down for the first 100 years... phew! 

Clorox Cowboy's picture

I hope you're not even remotely serious.

Gold Man-Sacks's picture

The oil shock of 2008 (not 2007) was caused by the moronic Bush stimulus.  To no surprise, giving everyone $600 does seem to have an affect on oil and gas prices.  It had nothing to do with Peak Oil.  If it did, why did the price drop back to $35?  Shouldn't we have less oil now than we did back in 2008?  Did the demand change that much?

Clorox Cowboy's picture

Yes, the demand did change that much.  We had this little thing called a "financial meltdown" if you recall.

Gold Man-Sacks's picture

OMG, the world oil demand changed a whole 2.3%!  Surely, that justified a 76% price drop.  Debating an unarmed man is not fair, so I'll stop.