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Guest Post: Russia Claims New Arctic Hydrocarbon Finds Effectively Double Nations Reserves
Submitted by John C.K. Daly of OilPrice.com
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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Take everything they say with a big grain of salt.
And three shots of vodka.
When will NATO attack?
But...but...TRAV7777 said peak oil was here!!
What a fucktard!
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.
I DRINK YOUR MILKSHAKE!!!
In Mother Russia, Milkshake drinks YOU!!
We now control all your base.
Can never control all your base. Can only debase your base.
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.
Thanks for reminding me to have a nice white, or maybe black, Russian.
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.
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!
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.
Hehe.
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?
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:-)
Lol
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!
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.
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.
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'
Do you remember what happened to him AFTER?
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?
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.
Cowboy - tell him to google EROI.
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?
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.
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?
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.
Your limited cranial capacity easily explains your astoundedness.
I'm shocked that many dinosaurs lived in the arctic to create such a pool of 'fossil fuels'. ;)
you're not quite stupid enough to believe oil comes from dinosaurs or other large animals, are you?
Uhmm, this symbol. " ;) " is a wink, which in the above situation mean 'said in jest'
Come on trav, lighten up
Don't take in personally. Peak Oil has made it too expensive for Trav to afford Vaseline. Chafing, you know.
"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.
before the earth's axis shifted the Arctic was a little bit like Miami Beach.
:o )
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:
http://news.bbc.co.uk/2/hi/science/nature/5034026.stm
Geography and Climate changes without humans.
you're right...it is impossible to be able to fully comprehend the depths of your stupidity
Are you looking at your mirror again?
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.
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
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.
Priced in gold, oil's cheaper than back in the early 60s. Do some homework, tard.
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.
Apparently the Russians are also in denial. Go tell Putin to start reading the oil drum.
"It is here. We will never go over 90 million barrels of crude daily."
@topcallingtroll
Given demand is somewhere in the low 85 million barrels per day why would you expect us to go beyond 90 mbbl per day?
It's not about total supply of oil in the ground...it'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.
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!
I hope you're not even remotely serious.
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?
Yes, the demand did change that much. We had this little thing called a "financial meltdown" if you recall.
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.
http://www.theoildrum.com/files/FIG_08_WORLD_OIL_CONSUMPTION_2009.PNG
the price of oil is set at the margins...the runup ran far further than it should have, but that was caused by a systemic and prolonged exceeding of production by consumption. It lasted perhaps a year or more as inventories were drawn down. Price had no choice but to shoot up to a point where it could crush demand.
US consumption is down to where it was 10 years ago
What's your point? Do you just prove Peak Oil is real, or something?
And production is up..and growing.
The price of oil is subject to much speculation and manipulation. When a country doesn't produce anything, but it guards most of the world's oil, you can expect endless talk about the lack of supply and high prices for producers who need the oil.
costs?? austerity dem workers to the bone.. when there is one world government, there will be no 'costs', just profit
what did it 'cost' to construct the pyramids?
The pyramid analogy shows a lack of understanding about history. Most of the workers who built the pyramids weren't slaves but rather seasonal workers who got paid for their work on the pyramids. It was more like an enormous stimulus program by the Pharoah.
Was that money debased to near salt levels?? that was what I was hinting at.. but yeah i should read up to see if those workers lived well or basically were FoxConned
Peak Oil is a illusion created by the powers to be to manipulate prices and justifying stealing your hard earned money.
We will NOT run out of oil in our lifetime or the next generation. What a puke Hoax.
Russia is most likely the richest nation in the world. Because of their oil and minerals.
They have the best mineral deposits of the world.
How many times does it have to be explained to you fuckin MORONS before you REALIZE that the implication of what you JUST SAID is that oil production can rise exponentially FOREVER.
If you AGREE that it CANNOT, then you BELIEVE IN PEAK OIL, you freakin IDIOT
Pot meet kettle.
HAHA, there's a TravsMom? Goes great with RobotTradersMom! Bravo!
Trav, will you tell me again the fairy story about zirconium cladding and nuclear power. Thanks in advance.
Correct. There will be plenty of oil in the ground at that time. It will be too expensive to get it to the surface though.
When you peak oil guys get your pants pulled down by reality, you've always have another BS story.
And the Tsar was the richest man in the world...
La plus ca change
Reserves say nothing about production, you fat greasy ball of shit
No, but they do say something about reserves -- and reserves are VERY important.
no, not particulary. Titan has infinite reserves of NG.
How much would you pay for a nice 50 year lease there?
I was unaware that the Artic Sea was on Titan.
Idiot.
You know where has an awful lot of NG? Uranus.
Trav, how many dinosaurs lived on Titan?
they're only important if you can bring them to the surface at a cheaper cost than you can sell them for.
Lmao!
Right, there is sooo much oil in the world that we are going to the least hospitable (costly) places on earth to get it.
Exactly. And the most expensive places. Production there probably won't last too long though, because demand will be destroyed through higher prices.
You meant to say the Saudi Arab desert has always been a hospitable place?
Hydrocarbons are currently the main source of the world’s electric energy and heat sources because of the energy produced when burnt. Often this energy is used directly as heat such as in home heaters, which use either oil or natural gas. The hydrocarbon is burnt and the heat is used to heat water, which is then circulated. Thanks a lot.
Regards,
rv dealers
Seriously it's true - people in Alaska witnessed it happen
hopefully santa claus has clout enough to fend off the eminent domain claims sure to hit.
otherwise its gonna be a disappointing december 25th for kids everywhere.
"i wonder what this present is going to be???"
"dammit! more oil. i wanted a pony!"
They announced that without consulting Rockefellers first? Axis of Devil?
Do you guys realize that this is an announcement of "undiscovered reserves"? This is the same sort of annoucement that Iraq and Iran make to try to beat the other. You don't have to do any seismic studies at all to make announcements like this.
Do you guys realize that this is an announcement of undiscovered reserves of "oil equivalent"? Not oil.
And do you guys realize that this is an an annoucement of such by a guy who is trying to talk other people to invest money into finding undiscovered reserves so that he, his coutry, can collect the majority of the money from any production that occurs?
When a barrel of oil is produced somewhere, the company that produces it gets maybe $5/barrel. The country gets the rest. Why in hell would he NOT lie to get companies to invest?
And do you realize that every oil producing nation does it, not just the ones who give us a headache. At the other end of this tunnel do you see the light that Reserves are not what we think they are? Ergo, the planet does not have as much oil as everybody thinks. : o)
Guys that have oil also look for investors. Let's see if he gets any.
Good numbers build good collateral. Believe it like you believe this. Perception is everything. I raise you a billion.
As a spinning top, the planet acts like a centrifuge and as oil is lighter than water, it centrifuges up in the gravity field, net-net. As the Arctic ice melts we can recapture the primordial atmosphere by kick-starting the second derivative, popping our cap in an exponential way and let the games begin. Skol!
Peak oil!
Peak Russia?
Vodka + Crude Oil = Black Russian?
peak oil was a narrative perpuated by GS to justify oil @ 140, which was a lucrative trade for them.
just like peak gold. peak copper. blah blah blah. You create the myth of supply constraints (while holding oil in a fleet of supertankers, so they don't get to refineries, and make it look like oil inventories are declining) to pull future demand to the present, and spike up prices.
Once again, price distortion, which misallocated capital, but got traders rich.
GS made so much $$$ off that myth trade, they are recreating it in other commodity classes.
case study: JPMorgan holding millions of tonnes of copper in nonbonded warehouses, before they start their copper ETF.
case study: GS buying the LME (london metal exchange)
case study: vast capital flowing to commodity trade, and less for manufacturing, and other sectors of the real economy. imabalances. imbalances.
case study: global stagflation from cost=push inflation from this commodity bubble. QED slowdown in global productivity.
Yes and I suppose there are tankers just ladden with gold and silver lined up somewhere offshore with the captain awaiting GS's "full steam ahead" orders?
Thanks, but I will take the numbers instead from the US Geological Survey, Silver Institute, etc and miners that I know personally.
Do you believe that money simply stops when it is paid to someone?
Oil production has peaked. We will need a new Saudi every couple of years simply to maintain current production.
and with retards like you who believe that oil production can increase exponentially forever, who the fuck can expect ANYTHING to be done?
This is really IT, isn't it? Even amongst those who'd come to ZH, the vast majority are simply TOO STUPID to understand peak oil or shut the FUCK UP long enough and trust those who do to tell them what the fuck to think!
are you saying there is no more oil from mountain tops?? not sure what this whole peak thing you speak of - come again?
Come again tomorrow and come clean all the time. You missed the production part.
Who says we need oil production to increase exponentially forever?
certainly not after the sun goes red giant. :o )
I bet they don't drill to save all the "undersea life."
i thought bin laden is dead, again! he's now part of the glacial coral reef!
Maybe Russia will be generous and bail out Greece and the Euro zone banks now?....maybe...?
The Russians always wanted a warm water seaport, right? Now they can take their pick...
Just as the world starts to need more oil...the polar ice receeds.
Sometimes it is better to be lucky than good.
The Eastern Mediterranean is already flocking with Russians. It wouldn't change much..
You said it, lady.
Bullish for Italian yacht builders.
It doesn't belong to them. It belongs to Canada.
Let them fight for it...Hockey fight!
The Arctic is being Militarized as we speak............
peak oil, peak water, peak fiat........where and how does it end........
http://nakedempire2.blogspot.com/search/label/arctic
No worries. We all know where thor stands on ice giants.
http://jpgdump.com/viewer.php?id=8659
peak talk
No such place, it's called Northern America.
It's state number 52 (51 is PR and 53 is europe).
i could have sworn Mexico was #53, but i always get confused when we get up into the fifties
1,2,3...50,51, many?
first come, first pump
(why is crude oil like a brothel?
say goodbye to the arctic, the only thing russians are good at is fucking everything up and then shooting you for it.
5 Russians read ZH, good, remember that extra Y chromosome is not a good thing. Unless drooling and masturbating is what you're into.
The great thing about Russians, they couldn't light a bag of shit on fire without somebody wanting their palm greased.
Gulf of Mexico?
Great success-- but go easy on vodka while operating off-shore drilling platform, comrades. And don't forget Greenland!
You rape that Arctic Putin! Yeah!
Putin will wrestle every bear to get to that oil!
In Russia, Arctic rapes you.
it's probably consensual
The Artisan/ Propoganda Class Citizen will have sway in awakening the Wetiko to the revolution.
http://www.youtube.com/watch?v=MlG5u4vb_FA&feature=youtube_gdata_player
Putin with another conquest
http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2010/4/30/1272...
There's some irony for you. Using carbon fuels has caused the Artic ice to receed...........revealing more carbon fuels!!!!!
"Using carbon fuels has caused the Artic ice to receed..........."
That's debatable.
Not to someone who has been conditioned by Al "I invented the Internet" Gore.
Gore http://nsidc.org/arcticseaicenews/2011/100411.html
anti gore http://www.real-science.com/arctic-ice-continues-recover
http://www.snopes.com/quotes/internet.asp
The cause doesn't matter, the resulting affects are undeniable and will have to be dealth with. You sound like a politician talking about shit that wastes more time and resources, let's talk about the reality of adapting and how we move forward for a change. Putin is that you?
yep, we'll be swimming in carbon fuels when Antarctica goes. of course, it'll be 90 degrees on top of Old Smokey.
Rosneft is the one we've been adding to here.
http://www.bloomberg.com/apps/quote?ticker=ROSN:LI
There go the Russians, LYING about economics again.
Sure those deposits are right next to some rare artifacts waiting for Putin to find.......
Haha... Show him drilling a new well. I can picture it already...
Thank God it wasn't Silver.
Too bad. I sigh with regret when another Empire discovers another huge supply.
The sooner the rape of the earth and the proliferation and circulation of all the plastic crap in the world ends, the better.
The last thing we need is the means to continue to fuel this inhuman, anti-culture we live in.
will be interesting to see what can actually be delivered. Either way, definately some trading opportunities here.
If you can't believe the Russians, who can you believe?
Banker's standing over holes in the ground. They never lie about what's in those holes. NEVER.
the FED and BBernanke?
the CIA, the Pentagon, the Department of Commerce, the BLS, the Treasury, the White House.
Oh, you said who can you believe.
I thought you said who CAN'T you believe.
1.668 trillion cubic feet
A TCF is squat, should it read 1,688 TCF?
a bit off topic but why is eurchf at 1.2385? have been there more rumors of peg being moved to 1.25?
They don't need a warm water port anymore: They accomplished the first super-tanker fuel delivery via the Northwest passage Ever just last month!
The Arctic ice is so depleted that for the first time in history Russia was able to deliver from their Arctic ports to Malaysia without the need to go through the old shipping lanes
http://arctic-roos.org/observations/satellite-data/sea-ice/ice-area-and-...
Forget the Reserve size, What is the flow rate and what time period?
It don't matter if I have a $1 million in my bank account(reserve size) What is the amount I withdraw per day? If I can only withdraw $50 a month the money in the bank ain't gonna help me if I am burning $100,000 a day in expenses.
I'm sure you wouldn't have a problem selling your bank account to someone else for $900K if you needed the cash right away.
Same applies to reserves.
until it has to actually be delivered and then the actual quality and and quantity do matter phucknut.
My fault, I didn't realize that the $100K/day wasn't an extraneous expense but an account maintenance fee. In that case, the analogy is valid and the reserves are indeed worthless.
yeah, because we can print all the oil right up, kinda just like borrowing it from a bank, right?
I can electronically CREDIT my gas tank with 23 gallons and drive right off?
No?
then SHUT THE FUCK UP
Temper, temper.