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Oil companies Arctic projects in deep freeze

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Information and graphic sourced from an FT article by Richard Milne in Oslo, Christopher Adams in London and Ed Crooks in New York, published 6 February 2015.

The first of two drilling rigs contracted by Shell will soon leave Singapore and once sea ice has sufficiently receded, will embark on a summer drilling project in U.S. Arctic waters, despite the objections of environmental activists. The Arctic is said to hold nearly a third of the world’s undiscovered gas and 13% of undiscovered oil.

With the recent dramatic fall in oil prices, there is unlikely to be more drilling rigs moving into Arctic waters unless there is a substantial recovery in the oil price.

Statoil says it is unlikely to drill in the Norwegian Arctic in 2015, and together with Dong Energy and GDF Suez, has handed back drilling licences for offshore Greenland.

Chevron have shelved their Canadian Arctic Beaufort Sea drilling plans indefinitely.

ExxonMobil’s joint venture with Rosneft for the Russian Arctic has been thwarted by western sanctions against Russia.

Cairn has had a disappointing experience off the west of Greenland with unsuccessful exploration.

Hence the future of offshore Arctic drilling depends on what happens to Shell this time round and what happens to the price of oil.

Extract from FT article

Wood Mackenzie says offshore Arctic exploration only really happens when oil prices are high. And, even at $100-plus prices there have been few substantial recent finds.

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