Are coming in higher than expected. Der Spiegel:
International oil companies are racing to develop new oilfields in the Arctic. But developing the vast reserves could be far more expensive than first thought, according to new calculations by US geologists obtained by SPIEGEL ONLINE.
Two complete failures and one aborted test drill — a miserable outcome. When Scottish company Cairn Energy published the preliminary results of its search for oil off the coast of Greenland last October, the firm’s share price plunged 7 percent in one day. Its findings revealed not a trace of black gold. On the contrary: the company said it would have to write off costs totalling €180 million ($246 million).
And still, the Arctic fascinates oil and gas firms more than virtually any other region at the moment. Companies are hoping to tap massive, undiscovered reserves in this remote area that is free from the political instability plaguing other oil-rich parts of the world. The polar treasure was the subject of the conference “Arctic Frontiers” that began on Monday in the northern Norwegian town of Tromsö. Almost 1,000 visitors made the journey far beyond the Arctic circle to attend.
Cairn’s oil exploration off the western coast of Greenland has attracted intense interest because it was the first such venture in years. It’s unclear how many will follow, because the vast cost of drilling in the Arctic is likely to become evident in the coming years. This is made abundantly clear in unpublished interim findings by the US Geological Survey obtained by SPIEGEL ONLINE. They refer to an area in the northeast of Greenland that had so far been regarded as a particularly promising location for oil exploration. Geologist Don Gautier and his research team examined what it would cost to search for oil in the East Greenland Rift Basins.
Scientists had previously estimated that the region could yield some 7.5 billion barrels of oil — 1.2 trillion liters. But statistically, the likelihood of producing that amount is the same as failing to find even a drop. However, the geology of the area is interesting — after all, on the other side of the Greenland Sea, along Norway’s west coast, there are attractive oil reserves that have been bringing in billions of euros for the Norwegian government for decades. Greenland is hoping for a similar boom.
The rest here.