Petroleum exploration in the Arctic

Canada

Drilling in the Canadian Arctic peaked during the 1970s and 1980s, led by such companies as Panarctic Oils Ltd. in the Sverdrup Basin of the Arctic Islands, and by Imperial Oil and Dome Petroleum in the Beaufort Sea-Mackenzie Delta Basin. Drilling continued at declining rates until the early 2000s. In all, some 300,000 km of seismic and 1500 wells were drilled across this vast area. Approximately 1.9 billion barrels (300×10⁶ m³) of oil and 32.4 trillion cubic feet (9.2×10¹¹ m³) of natural gas were found in 73 discoveries, mostly in the two basins mentioned above, as well as further south in the Mackenzie Valley. Although certain discoveries proved large, the discovered resources were insufficient to justify development at the time. All the wells which were drilled were plugged and abandoned.

Drilling in the Canadian Arctic turned out to be challenging and expensive, particularly in the offshore where drilling required innovative technology. Short operating seasons complicated logistics for companies who had to contend with the additional risk of variable ice conditions.

Exploration has demonstrated that several sedimentary basins in the Canadian Arctic are rich in oil and gas. In particular, the Beaufort Sea-Mackenzie Delta Basin has a discovery record for both gas (onshore) and oil and gas (offshore) although the potential beneath the deeper waters of the Beaufort Sea remains unconfirmed by drilling. Discoveries in the Sverdrup Basin made between 1969 and 1971 are principally of gas. The several basins in the eastern Arctic offshore have seen little exploration activity.

Russia

In June 2007, a group of Russian geologists returned from a six-week voyage on a nuclear icebreaker 50 Let Pobedy, the expedition called Arktika 2007. They had travelled to the Lomonosov ridge, an underwater shelf going between Russia's remote, inhospitable eastern Arctic Ocean, and Ellesmere Island in Canada where the ridge lies 400m under the ocean surface.

According to Russia's media, the geologists returned with the "sensational news" that the Lomonosov ridge was linked to Russian Federation territory, boosting Russia's claim over the oil-and-gas rich triangle. The territory contained 10bn tonnes of gas and oil deposits, the scientists said.

Greenland

In the years post 2000, sedimentary basins offshore Greenland were believed by some geologists to have high potential for large oil discoveries. In a comprehensive study of the potential of Arctic basins published in 2008, the U.S. Geological Survey estimated that the waters off north-eastern Greenland, in the Greenland Sea north and south of the Arctic Circle, could potentially contain 50 billion barrels of oil equivalent (7.9 x 10^9 m^3) (an estimate including both oil and gas). None of this potential has been realized.

Prospecting took place under the auspices of NUNAOIL, a partnership between the Greenland Home Rule Government and the Danish state. Various oil companies secured licences and conducted exploration over the period 2002 to 2020. Much seismic exploration and several wells were drilled offshore western Greenland, but no discoveries were announced. Drilling proved expensive and the geology more complex than expected, discouraging further investment.

Greenland has offered 8 license blocks for tender along its west coast by Baffin Bay. Seven of those blocks were bid for by a combination of multinational oil companies and the National Oil Company NUNAOIL. Companies that have participated successfully in the previous license rounds and have formed a partnership for the licenses with NUNAOIL are, DONG Energy, Chevron, ExxonMobil, Husky Energy, Cairn Energy. The area available, known as the West Disko licensing round, is of interest because of its relative accessibility compared to other Arctic basins as the area remains largely free of ice. Also, it has a number of promising geological leads and prospects from the Paleocene era.

In 2021, following the election of a new executive, the Greenland government announced it would cease petroleum licensing and disband the state oil company Nunaoil. This political development, combined with the high costs of drilling exploratory wells and discouraging exploration results to date, it is unlikely that the Greenland offshore will see further exploration for the foreseeable future.

United States

Prudhoe Bay Oil Field on Alaska's North Slope is the largest oil field in North America, The field was discovered on March 12, 1968, by Atlantic Richfield Company (ARCO) and is operated by Hilcorp; partners are ExxonMobil and ConocoPhillips.

In September 2012 Shell delayed actual oil drilling in the Chukchi until the following summer due to heavier-than-normal ice and the Arctic Challenger, an oil-spill response vessel, not being ready on time. However, on September 23, Shell began drilling a "top-hole" over its Burger prospect in the Chukchi. And on October 3, Shell began drilling a top-hole over its Sivulliq prospect in the Beaufort Sea, after being notified by the Alaska Eskimo Whaling Commission that drilling could begin.

In September, 2012, Statoil, now Equinor, chose to delay its oil exploration plans at its Amundsen prospect in the Chukchi Sea, about 100 miles northwest of Wainwright, Alaska, by at least one year, to 2015 at the earliest.

In 2012 Conoco planned to drill at its Devil's Paw prospect (part of a 2008 lease buy in the Chukchi Sea 120 miles west of Wainwright) in summer of 2013. This project was later shelved in 2013 after concerns over rig type and federal regulations related to runaway well containment.

October 11, 2012, Dep. Secretary of the Department of the Interior David Hayes stated that support for the permitting process for Arctic offshore petroleum drilling will continue if President Obama stays in office.

Shell, however, announced in September 2015 that it was abandoning exploration "for the foreseeable future" in Alaska, after tests showed disappointing quantities of oil and gas in the area.

On October 4, 2016 Caelus Energy Alaska announced its discovery at Smith Bay could "provide 200,000 barrels per day of light, highly mobile oil".

Norway

Rosneft and Equinor (then Statoil) made the Arctic exploration deal in May 2012. It is the third deal Rosneft has signed in the past month, after Arctic exploration agreements with Italy's Eni and US giant ExxonMobil. Compared to other Arctic oil states, Norway is probably best equipped for oil spill preparedness in the Arctic.

Environmental concerns

Petroleum exploration and production operations in the Arctic have faced concerns from organizations and governments about the potential for detrimental environmental consequences. Firstly, in the event of a large oil spill, the effects on Arctic marine life (such as Polar Bears, Walruses and seals) could be calamitous. Secondly, pollution from ships and noise pollution from seismic exploration and drilling, could negatively affect fragile Arctic ecosystems and may lead to declining populations. Such issues concern Indigenous populations who live in the Arctic and rely on such animals as food sources.

In response to these concerns, the Arctic Council working group on Arctic Monitoring and Assessment Programme (AMAP) undertook a comprehensive review of Oil and Gas Activities in the Arctic - Effects and Potential Effects. In another initiative, Greenpeace, an independent global campaigning network, have launched the Save the Arctic Project since the melting Arctic is under threat from oil drilling, industrial fishing and conflict.

Response of governments to mounting concerns about the risk of petroleum operations in the Arctic offshore include regulatory changes and the moratorium on offshore leasing issued in 2016 for the Arctic marine waters of both the United States and Canada (and subsequently in Canada a prohibition of oil and gas operations). Consequently, no leasing or operations have been approved for the Canadian Arctic offshore since that year.

In 2021, the Greenland government ended plans for future licensing for offshore exploration citing high costs and climate change impacts.

A summary of the status of offshore oil and gas activities and regulatory frameworks in the Arctic was published by PAME in 2021. (Program for the Protection of the Arctic Marine Environment.). The Deepwater Horizon disaster in the Gulf of Mexico stimulated much concern about the consequences of a similar event in Arctic waters and has resulted in many developments in regulation of operations and management of oil and gas leasing by countries active in Arctic exploration.

In 2021, the Arctic Environmental Responsibility Index (AERI) was published that ranks 120 oil, gas, and mining companies involved in resource extraction north of the Arctic Circle in Alaska, Canada, Greenland, Finland, Norway, Russia, and Sweden. The Index measures companies' environmental activities and demonstrates that oil and gas companies are generally ranked higher than mining companies operating in the Arctic.

Geological basins in the Arctic

• Alaska North Slope
• Baffin Bay
• Barents Sea West Barents Sea and East Barents Sea
• Beaufort Sea (Mackenzie Delta-Beaufort Sea Basin)
• Sverdrup Basin (Canadian Arctic Islands)
• East Siberian Sea
• Greenland (North Greenland)
• Hope Basin
• Kronprins Christian Basin
• Laptev Sea
• North Chukchi Sea
• North Kara Sea
• Pechora Sea
• South Kara Sea