Royal Dutch Shell PLC's (RDSA.LN) plans to drill for oil and gas in the Arctic region will be centered on Alaska and Greenland, though the Anglo-Dutch major is also eyeing Russia's far north as an exploration frontier, said Chief Executive Peter Voser.
Royal Dutch Shell PLC's (RDSA.LN) plans to drill for oil and gas in the
Arctic region will be centered on Alaska and Greenland, though the Anglo-Dutch
major is also eyeing Russia's far north as an exploration frontier, said Chief
Executive Peter Voser.
"For us the focus is in
Alaska
and
to some extent in
Greenland
, although in the coming years
there may also be opportunities in
Russia
,"
said Voser, in an interview published on the company's website that sets out
his priorities for the year ahead.
Although Shell's intention to drill in
Alaska
has
been well-documented--the company has received the necessary clean-air permits
and expects to commence operations there this summer--the renewed focus on
Greenland
is
the latest sign that the energy giant plans to open a new exploration frontier
in one of the world's last undiscovered oil and gas provinces.
Vast hydrocarbon reserves are believed to lie off the coast of
Greenland
. The
U.S. Geological Survey estimates reserves of 31 billion barrels of oil
equivalent yet to be tapped off the west coast, while another 17 billion are
estimated to sit under the seabed off the island's east coast.
Shell was awarded two license blocks to explore for oil on
Greenland
's
west coast in 2010 as part of a consortium with
France
's GDF
Suez SA (GSZ.FR),
Norway
's
Statoil ASA (STO) and
Greenland
's Nuna Oil.
Another licensing round is due to take place in 2012 and 2013, although these
are for
Greenland
's east coast, which has a rougher climate.
In all,
Greenland
has issued 17 exploration licenses for its west
coast, to 11 companies. Of these, 12 licenses are active, but the only company
to have test-drilled in recent years is
Scotland
's
Cairn Energy PLC (CNE.LN), although two campaigns in 2010 and 2011 failed to
result in commercial discoveries. Last week, Cairn and Statoil announced plans
to team up on Cairn's next phase of Arctic exploration.
However, Shell risks unleashing the wrath of environmental campaigners, who are
strongly opposed to oil companies drilling in the region. They argue that a
spill could be impossible to contain and risk damaging the fragile ecosystem. Cairn's
two drilling campaigns were disrupted by protesters attempting to scale its
vessels.
Voser acknowledged that the Arctic environment was a particularly sensitive
one, but said he believed Shell could safely conduct operations there.
"Of course developing the
Arctic
has
environmental challenges but I believe these challenges can be managed with the
right approach to safety and to sustainability."
"With energy demand rising, all resources must be developed to help meet
it -- including the
Arctic
," said Voser.
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