The decline in global oil prices that began in the summer of 2014 carries with it a number of risks in assembling a whole range of major oil and gas projects, including shale gas extraction projects, deep-water offshore projects and projects in the Arctic shelf. By 2040 energy demand will be 40–60 per cent greater than in 2010. Oil will continue to play a leading role in the global energy balance. Offshore oil and gas resources in the Arctic could, in the medium and long term, play significant role both in maintaining current oil and gas production levels and in ensuring growth in the future.
The decline in global oil prices that began in the summer of 2014 carries with it a number of risks in assembling a whole range of major oil and gas projects, including shale gas extraction projects, deep-water offshore projects and projects in the Arctic shelf.
In these conditions, despite the ongoing surplus of global oil production in relation to consumption, the question nevertheless arises: how can we maintain current production levels in the medium and long-term and ensure growth in order to meet world demand?
According to the Organization of the Petroleum Exporting Countries (OPEC) and International Energy Agency (IEA) estimates, by 2040 energy demand will be 40–60 per cent greater than in 2010. Oil will continue to play a leading role in the global energy balance, accounting for 25–27 per cent of the total supply, with gas making up 24–26 per cent (compared to 35 per cent and 26 per cent, respectively, today).1 A large proportion of oil and gas production by 2040 will take place at deposits that have not yet been explored.
Under these circumstances, taking the projected volume of the Arctic shelf’s undiscovered oil and gas reserves into account, the estimated 90 billion barrels of oil and 47 trillion cubic metres of natural gas,offshore oil and gas resources in the Arctic could, in the medium and long-term, play significant role both in maintaining current oil and gas production levels and in ensuring growth in the future.
1. It is necessary to start developing economically sound technologies and technical solutions capable of ensuring safe and efficient oil and gas production, and to start building the appropriate infrastructure, given that 5–10 or more years may elapse between making the decision to start geological exploration and starting commercial oil production in the Arctic. Given the scale of the task at hand, it is expedient to use private-public partnership mechanisms in this area.
2. Arctic states should start developing unified rules and standards. It will allow oil and gas companies to develop and use unified technical solutions in all the states of the region without spending time and money on adapting to the requirements and rules of each individual country. Some work in this area is currently being done, but it is largely fragmented and non-systemic.
3. Enhancing cooperation between Arctic states and oil and gas companies concerned becomes more and more relevant in the area of creating common approaches to developing new technologies, unified standards and rules. It would be expedient to continue using the Arctic Council, a greatly respected high-level intergovernmental forum, as a venue for carrying out this work.
4. Enhancing international Arctic cooperation allowed to ensure top security and low level of confrontation in the region. Arctic states need to further avoid politicizing Arctic cooperation against the general geopolitical background. Otherwise, it will have a significant impact on the prospects of conducting coordinated policies and implementing joint projects. Transferring international tensions into the Arctic against the background of sanctions may prompt Russia to consider involving non-regional actors, primarily Asian states, in the Arctic cooperation. Under such circumstances, international cooperation in the Arctic may undergo serious changes, and the volume of contracts for Western-made shelf development equipment may decline significantly.
Arctic Oil and Gas Resource Development: Current Situation and Prospects, 1,26 Мб