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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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very good analogy to peak oil and you dont get it, lololololololol I GUESS YOU REALLY CAN'T FIX STUPID
see above
Buy the shit out of the ruble before they resume printing!!! Still one hell of a carry trade.
Abiotic oil.
What, you don't believe in oil from dead arctic dinosaurs?
Well, it was probably tropical when Al Gore invented the Artic. But actions or should I say concrete results speak louder than any lamestream and lamescience can ever paper over. The Russians went from nada to #1 with their strange abiotic theory of oil.
are you retarded?
Russia/USSR was either #1 or #2 or #3 world oil producer for the past 60 years.
They were never nada unless by nada you mean pumping more than anyone other than the US or Saudi Arabia
right. they had other fish to fly and not too many autos to drive
when pigs can fly
A lot of cornocupians are using this unverified statement out of russia to slam peak oil.
The peak is here. We will never go over 90 million barrels of conventional crude ever. We need this supply, if it exists, to replace depleting fields.
Thank god for the additional trillions and trillions of bonus natgas that we figured out how to obtain.
The peak EROEI may last forty years now, but the peak in crude is behind us now. In ten years if we are not over 90 million barrels of crude production daily then i hope some of you will be believers. Peak oul is not civilization collapsing if the peak is forty years.
Much of the civilization that has sprouted in the petro age fully deserves to collapse like a rotting pumpkin. I hope the Russkies never get a gallon of it.
the russkies will be drinking oil out of their pipelines from the east while we're pacing the widow's walk waiting for hundreds of Exxon Valdezs to offload.
peak oil 2012
depends upon what you mean by civilization.
The growth age is over.
And for idiots to say oh we have no problem, we'll just burn gas...sets us up for a bigger crash because depletion curves in NG wells resemble BASE jumping spots
If anything we are hitting peak oil demand. And if your economic system depends on the price of oil, you'd better be sure that supply matches demand or the system is headed down. And you'd better have a good explanation as to why supply always seems to be tight.
it always seems tight because it's really even tighter than you're admitting to. it's called
peak oil 2012
It's tight for the reasons I cited. Peak oil is just a smoke screen. You guys were completely debunked in the 1970s, but since it is convenient for some rich folks to have this argument around, here you are again. Soon you'll be joining your climate change buddies in the trash heap of history. This time to stay.
Scientists theorize that the oil took mere decades to form, instead of the millions of years generally required. Experts say that the underground carbon in Russia is under intense pressure from bearing the weight of Vladimir Putin's enormous balls.
peak oil, my ass....
let's have a look
I bet that well has been over drilled already.
That's nice. Lets do some math, shall we? The world burns about 83 million barrels per day of oil. 90 billion divided by 83 million is 1,084. That's how many days of oil (at today's consumption) the entire arctic will provide if it could be pumped bone dry.
Woohoo! Break out the champagne!
Oh, and after the Arctic is pumped dry, where ya gonna go? Mars?
I hear there is gas in Uranus.
How many times do I have to tell you people that you cannot divide reserves by desired consumption?
You have just led morons to believe that we've staved off the problem for another 1084 days whereupon "we will just find" another 1000 somewhere and on and on.
The production rate of these arctic deposits will likely satisfy earth's present consumption rate for maybe 1 hour a day. That's being HIGHLY optimistic (a 4mbpd production base from the entire deposit structure).
ONE hour per day at peak is the best this can do. It's the best tarsands can do, even with "reserves bigger than Saudi Arabia"
Yes, and one hour per day is great! That's a huge amount, when you consider that most oil is wasted on bullshit (e.g. personal autos). The amount of oil needed (for the mid-term, until sufficient conversion to renewables) to run/create the things we truly require is rather small -- perhaps 20% of current consumption (a guess). In that light, the "one hour a day" figure suddenly becomes very large.
Just as an FYI, in case anyone cares, Russia's 10.2 mbpd requires 6,000 wells per year drilled to offset the apparently 8%/yr geological decline in production from old emtying fields.
That 6,000 wells has a cost projection of $23 Billion over the next 8 yrs. The company that puts up the money gets $5/barrel, and each well produces less and less and less as they drill to smaller and smaller bubbles.
Lukoil is deeper in the old fields than all the other Russia companies. Its VP of Exploration gave Bloomberg an interview some months ago in which he announced Lukoil's "domestic" production was falling 5%/yr, even after drilling. They were offsetting it by buying leases in Africa. They anticipate the 5% decline will accelerate because return / well was falling so sharply that they could not continue to invest in new ones.
Point being, if anything at all is found among these undiscovered reserves, any such production has a steep down escalator to try to sprint up to do anything but stay in one spot for overall Russia production.
There is more though.
I remain an optimist and get ridiculed by peak oilers and cornocupians because i belief we have a forty year undulating plateau of natgas and crude equivalents at approximately a cost that allows a recognizable modern civilization to continue
You're right if resource nationalism is trumped by economics for the next 40 years. If Russia and Iran, however, react to shortages by deciding to keep most, or all, of their oil for domestic military and national consumptions, large portions of oil on the market could dissappear suddenly.
Yeah...... so let's invade, right?
calling manifest destiny. calling manifest destiny. do you read me?
Estimates of undiscovered deepwater Arctic reserves is a long, long way from a cheap tank of gas. The proof of the pudding is in the drilling.
Eskimo Sheiks - they'll build a huge glassed-in tropical paradise with articial sunlight - 6 months of darkness? I don't think so. Club Med at the North Pole...
hydrocarbons = natural gas? russia supplies europe, so Jager!
no environmental danger. check.
cake-walk with the new technologies, too but remember what sergeant shultz said about the r-r-r-r-ussian front? people from these jobs will go south to siberia for vacation! they'll build a gazillion dollars worth of new ice-breaking ships just to bring in the hookers and blow, tho!
Heh. Irony, right there. Oil itself is making the world more suitable for finding more oil. To paraphrase the line from "Lord of the Rings": The oil wants to be found.
But they don't have to drill one Arctic exploration well or pull up a single barrel of oil, or even verify a single oil field. Just the rumor that there are suspected reserves "for 150 years" will keep the addicts sucking on the syringe.
pwned. fail.
The flip side is when high oil prices increase the price of everything else, including the marginal cost of locating, acquiring, refining and distributing petroleum products. At a certain point, high oil prices themselves cause higher oil prices, until the economy crashes (and prices crash), and we do it again, and again, and again.... for a while. That fourth "again" might not be possible.
Estimates for drilling and operating in the Russian arctic is in excess of $100 a barrel, thus taking the marginal oil barrel cost to at least $100 going forward; no wonder Brent is having a hard time dipping under $100.
Regards,
Nawar
When the US announces Thorium powered reactors able to create synth fuel and take us off of foreign oil, we will be paying $2.00 for gasoline, for the next 100 years.
I have one word for you
High-pressure-circulating-sodium.
Thorium reactors make for a really dangerous operating environment. Otherwise they would be commercialized already.
If USA wants piece of the land up north, then there will be possible war
peak ice flows!
peak Pepto Bismo
The world uses 30 billion barrels of oil a year, more or less. 90 billion barrels extends the world's suppy of oil by 3 years and change.
Not bad. A little more here and there. It adds up and keep us all from starving that much longer. Assuming of course, that the world sees any of this oil. By the time it's flowing out to a refinery (10-15 years?), there's every chance in the world that Russia may have decided to keep what they've got for their own military and native population, selling only a little on the world market at very, very high prices.
Oh, see, there you go using mathematics again. Peak Oil deniers only traffic in techo-unicorns. You start putting actual numbers in front of them and they get confused.
I don't believe anything except profit. Does anyone really think we would be drilling oil 3 miles down in the Gulf, 5 miles down in Brasil or talking about drilling in the Arctic, if oil was indeed plentiful? Can we just stick a straw in anywhere but instead we choose to spend hundreds of thousands of dollars per hour to mobilize, drill, extract and transport in these conditions? EROEI - learn it and love it.
As far as replacing oil goes; that is a nonstarter. The energy contained in a drop of oil is not matched by anything. Nuclear is a bit magical, but has its own problems and doesn't really lend itself to the largest usage of oil; personal transportation.
Wait, this is bullish for uh, er, something, right?
I think peak oil is pretty soon. But if this is a spectacular find, let's see the numbers. What's the net energy? What are the required capital expenditures? 100 years at 0% growth rates or some exponential increase? Fuel equivalent means nat gas, too, I suspect.
Of course, those who think there is no possibility of peak oil salivate at this story. They don't do much thinking, though.
hmm, birth of another new empire? it has to find a home, the empire does, after the current one collapses. ponzi scheme of empires, just keeping their existance as long as possible... but the world is getting saturated.
everytime i read through the comments to actually learn something meaningful, i feel like the uncool boy at school who doesn't get the inside jokes and references of the zh elites...maybe i'm the only one who feels this way?
aaand war.
120 years ago or so, the leading energy source in the world was coal.....and then some years later, a bunch of oil was discovered in the Middle east, and the world gradually converted our energy usage partly from coal to oil.....then somethnig called natural gas was discovered...and similarly, a conversion of energy usage from both coal and oil to natural gas occurred.....i bet 100 years ago, there were people running around saying we were at peak coal in the world....have we run out of coal yet? nope...we seem to have plenty of it.......not too long along, the same people were claiming "peak natural gas" until human innovation discovered horizontal drilling and fracting and natural gas fell to less than $4 per cf.....meanwhile, we keep finding more and more oil everywhere as evidence by the Russian artic find...same with natural gas...we keep finding more and more...and we keep getting better at drilling for both oil and gas making our drilling more efficient and therefore making better use of our "limited" oil and gas resources.....the bottom line is this....technology and human innovation are the key to not only discovering new forms and sources of energy but also maximizing the resources that this planet has.....i agree that peak oil is simply a mandra used to by the oil companies in order to maxmize their profit margins..... it was the market place that discovered these new sources of energy, not huge investments by governments around the world.....
a - fucking - men
Yes, you're right. Peak oil is just a "mantra." It is no more difficult to drill for oil in the arctic with billion metric ton ice flows than it is in the Texas panhandle. And like you said "a bunch of oil" was discovered in the mideast. I can't keep up with all the technical oil jargon but a bunch sure sounds like a lot! And as we both know, the oil companies are keeping hundreds of billions of bbls of oil in reserve just so they can run the price of gas up and make more profit. That's why they are drilling down two miles below the sea surface and another mile down below the seabed at 350 degree temperatures and 20,000 psi, because there is so much oil left on land, but they just want to hang onto it for a little while longer. I listened to this Baptist minister called Lindsey Williams who says it's all just a big conspiracy by the oil companies. He knows because he carries a bible and is much smarter than lefty geologists and petroleum engineers who are all tree huggers and NWO minions. Also Lindsey sat in on a meeting once in anchorage with Mr. X and the oil company executives told him that it was all just a big conspiracy to control the price at the pump. There you go. What more proof do you need?
I admire your brilliant insight and considerable knowledge on this subject. I can see you will make significant intellectual contributions here at ZH.
plenty of oil here. bunches of it. nothing but oil to see. oil as far as the eye can see. please keep moving along while we extract it.
:o )
And another thing, as we move from wood to coal to oil to natural gas, we move further from carbon to hydrogen on the hydro-carbon scale. Pollution per unit of energy goes down. The next step is pure hydrogen.
Sorry Mr. Gore.
I hope you're right but we are NOT yet even close to the hydrogen and solar electrical age. If we ever get there. So don't extrapolate so fast. You're behaving like a premature ejaculator about energy change mantra.
We moved from wood to natgas in 150 years. Our problems are political not technological.
Pentagon passes out free Pepto Bismo
I wouldn't be unhappy if russia nuked dc, londonistan, brussels, and tel aviv.
The russian deposits will be exploited by western OIL behemoths. Putin cannot create a market economy based on KGB style government. It looks like PUtin will be there until 2024! Russia needs Germany/China/EU as market outlets for its gas. It will need USA/CHina for outlets of its Arctic oil. Russian consumption will not match production as Putin's Russia will stay sovietized in Oligarchical stagnation. We are in a Saudi style economic grid-lock. In most parts of the world who believe in market economies the producer countries are now consuming as much as they drill out of ground. This is the normal trend. It won't be in russia. As the Oligarchs like to keep 99% of the profits to themselves like in Saudi. The day USA/EU go that way we will truly have world order of feudal style.
THAT IS WHAT THE FIGHT IS ABOUT FOR THE NEXT THIRTY YEARS. PEOPLE VS OLIGARCHY. THIS CRISIS IS JUST THE ENTRY PORT TO THIS WORLD WIDE STRUGGLE.
It doesn't matter if the energy to extract something is greater than the BTU's contained.
1) Nuclear Thorium Energy
2) That huge fireball in the sky
By your 'logic' I, my body, am unsustainable by EROI as I ingest plants that took more energy to bring to my body than they deliver in nutrition.
Except for the reality that The Sun, Sol, provides the excess energy in abundance every day. This is how the plants grow, where the excess 'free' energy comes from. Tool up a bunch of Thorium reactors to convert sea water and other elements into synthoil, and your EROI is a pointless red herring on a 1,000+ year time frame.
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