EGI

Oil Exploration in the Arctic

Alastair Fraser

EGI Chair in Petroleum Geoscience

Imperial College London

EGI

Distinguished Lecturer

Sponsored by Shell

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Outline

• Do we need Arctic Oil & Gas resources? – Global energy perspective

– USGS assessment

• Arctic Geology – Crustal structure & Arctic Ocean development

– Chronostratigraphy

– Play systems in Arctic North America & Europe

• Technology

• Socio-Political aspects – Who owns the Arctic?

– Indigenous peoples

Arctic Oil Exploration: Key Drivers • Arctic represents the final frontier for conventional Oil & Gas exploration

• Approximately 200 billion barrels (OE) already discovered

• USGS estimate YTF of 114 billion barrels of undiscovered oil and 2000

trillion cubic feet of natural gas

• Access opportunities becoming increasingly available

– Cairn Energy - $600 million (4 well & 3D seismic) exploration program in West Greenland

following on from 3 wells completed in 2010

– Statoil announce significant new discoveries in Norwegian Barents

– Norway-Russia preliminary agreement to settle median line dispute in Barents Sea, April

2010. Now ratified by Norwegian Storting and Russian Duma

– Regional 3D seismic programme in Canadian Beaufort

– ExxonMobil agreement to explore Russian Arctic with Rosneft

– Shell plans to drill Chukchi & Beaufort Sea leases in Alaska

– East Greenland licence rounds 2012 & 2013

A map of license agreements between Rosneft and ExxonMobil in

Russia’s East Arctic, after Oil & Gas Journal

http://iup.physik.uni-bremen.de:8084/amsr/amsre.html

Feb 26th 2011

National Geographic Magazine 1971

The Arctic

World Commercial Energy Use

BP Energy Outlook 2030, (2011) http://www.bp.com

120

100

80

60

40

20

0

Billion bbl (oe)

Hydro

Gas

Oil

Coal

Renewables*

Nuclear

* Includes biofuels

1870 1910 1950 1990 2030

USGS Arctic Undiscovered Resources -

2009 • 114 billion barrels of oil

• 2000 trillion cubic feet of gas

• 44 billion barrels of natural gas liquids

• If estimates are correct this represents more than 1/5th of the world’s conventional undiscovered resources

Photo courtesy of John Simmons OnComminications & Liz Jolley BP North Slope Alaska February 1979

Arctic Undiscovered Oil - USGS colour-coded for mean estimated undiscovered volumes

D L Gautier et al. Science 2009;324:1175-1179

D L Gautier et al. Science 2009;324:1175-1179

Arctic Undiscovered Gas - USGS colour-coded for mean estimated undiscovered volumes

Arctic Frontiers

Mercator’s Septentrionalium Terrarum descriptio

Duisburg 1595 (36.5cm x 39.2cm) Copper engraving

Peary

6th April 1909

Nansen 86O14’

April 1895

Fram

1893-96

22nd March 2009

Regional

ice flow

pattern

Ice Summary

Spreen, G., L. Kaleschke, and G. Heygster (2008), Sea ice remote sensing using

AMSR-E 89 GHz channels, J. Geophys. Res., doi:10.1029/2005JC003384

Titanic

April 1912

Manhattan

September 1969

Oil & Gas fields & resources

Arctic oil & gas fields from IHS

Canada

(B/M)

3 bboe

Canada

(Arctic Islands)

3 bboe

Alaska

37 bboe

Russia

(S Kara/ W Sib)

87 bboe

Russia

(Timan-Pechora)

21 bboe

Russia

(Barents)

22 bboe

Norway

(Barents)

2 bboe

Norway

(Atlantic)

5 bboe

Database: Offshore Wells

Free Air Gravity & Ocean Crust Model

Free air gravity compilation by Mark Longacre

Cretaceous

Tertiary

Amerasia Basin

N Atlantic

Eurasia Basin

Baffin Bay

Alpha Ridge

Mendeleev Ridge

Structural Provinces

Arctic Gravity project 2008

Chronostrat Line

Mackenzie

Delta

Lena

Delta

Cretaceous

Tertiary

Passive margins & extensional basins

Gently inverted extensional basins

Fold-thrust system

Arctic Chronostratigraphy

Alaska

Chukotka

EastSiberian

Sea

ChukchiSea

LaptevSea

NewSiberianIslands

WrangelIsland

NorthwindRidge

CHRONOSTRATI

GRAPHY

AGEMa

RS

S

S

S

R

R S

S

S

S

R

R

S

WrangellNorthwind

Ridge AlaskaNew Siberian Is.TertiaryArctic

JUR

TRIAS

SILUR

PERM

ORD

CARB

CAMB

DEV

VENDIAN

RHIPHEAN

CRET

Northwind Ridge

SvalbardBarents

Dredge samples

Lyakhov Kotelnyi NovayaSibir

Bennett Henrietta

R

100

200

400

600

500

700

300

Alaska

B

A

100km

S N

B A

adapted from Hubbard et al 1990

S

Barents - Kara Sea

A

B

Drachev et al 2011

W E

200 km

top Jurassic

top Neocomian

Uvat

top Triassic

Kalchinskoe Pikhtovoe Ust-Tegusskoe

1.0

2.0

3.0

4.0

TWT (

secs)

Reconstruction by Ron Blakey, NAU Geology

? Distribution of

Triassic (Shublik)

source rocks

Pangea

Palaeo Tethys

Neo Tethys

260 Ma Late Permian

Palaeozoic paleogeography

Mesozoic palaeogeography

Reconstruction by Ron Blakey, NAU Geology

? Distribution of Late

Jurassic (Kimm

Clay/Bazhenov) source

rocks

Gondwana

Central Atlantic

Neo Tethys

Laurasia

150 Ma Late Jurassic

Tertiary palaeogeography

Reconstruction by Ron Blakey, NAU Geology

? Distribution of

Eocene (Azolla event)

source rocks

50 Ma Eocene

Russian proposal to use nuclear-powered drilling submarine in the Arctic?

Leningradskoye Field – Kara Sea

Vladislav Navin

Sub-surface Separation and Conversion

Geoff Maitland, Imperial College

Technology

Conflicting interests

• Governments – energy security & the next election

• Indigenous peoples – see nature as resources needed to

survive

• Environmentalists – Arctic as a pristine wilderness

• Oil Companies – driven by short term shareholder value

and demands

Greenland's separatist Prime Minister Kuupik Kleist. Photo: Fernando Morales

Polar Bears storm Cairn Energy’s

Edinburgh HQ

Cairn Energy announces Greenland

Oil Find

The Battle of the South Kara Sea

BBC News 14.1.11

BP has signed a joint venture with Russian

energy firm Rosneft to exploit potentially huge

deposits of oil and gas in Russia's Arctic shelf.

BP's chief executive Bob Dudley: ''This is a

historic moment for BP''

Financial Times 30.8.11

ExxonMobil's joint venture with Rosneft has

dashed any hopes that BP had of reviving

its deal with Rosneft that was blocked in

May. Russian Prime Minister Vladimir Putin

with Exxon chief Rex Tillerson at the signing

ceremony in the Black Sea resort of Soch

The Gaurdian 21.03.13

Rosneft takes over TNK-BP in $55bn deal. BP

collects $16.7bn cash and 12.5% stake. The deal

takes BP's stake in Rosneft to 19.75%, and BP

will get two seats on the Russian company's

board.

Maritime juristriction & boundaries in the

Arctic

IBRU Durham University

The Mir-I is one of two Russian craft that dived to the Arctic floor. Russian explorers planted their country's flag on the seabed 4,200m (14,000ft) below the North Pole

Hans Island

Resolved

Sept 2010

141oW Meridian

Agreed boundaries

Canada – Greenland 1973

Greenland – Iceland 1997

Greenland – Norway 1995

Greenland-Iceland-Norway tripoint 1997

Denmark - Norway 2006

Iceland - Norway 1981

Norway – Russia 2010

Russia – USA 1990

Adopted from map by W.K. Dallmann published in Arctic Human Development Report (2004). Data and information

compiled by W.K. Dallmann, Norwegian Polar Institute and P. Schweitzer, University of Alaska Fairbanks

Arctic Indigenous Peoples About 4 million people live in the Arctic. 15% are indigenous peoples

0 500 1,000

Kilometres

0 years 3-5 years 5-7 years 10+ years 20+ years

0-1

Russian Arctic Timing of Potential Production - Years

Rosneft/XM

Summary

• Vast unexplored areas within a proven petroleum province

• Database is weak - particularly regional seismic & wells in the high

Arctic

• Key to success will be prediction of world class regional source rocks

• Future interest may focus on unexplored passive margins and

associated delta systems

• Sustainable development will require real partnerships between

governments, industry and most importantly indigenous peoples

– consistent approach required across all political boundaries

• But is it all happening too fast? – $$ ahead of enabling technologies