The EIA reports that, according to an assessment by the U.S Geological Survey, ‘the Arctic holds an estimated 13% (90 billion barrels) of the world’s undiscovered conventional oil resources and 30% of its undiscovered conventional natural gas resources’. However, oil-drilling operations in the region are extremely challenging as both high-cost and high-risk.

Main challenges:

• Remote locations and harsh weather conditions (extreme cold, long seasons of darkness, high wind, hurricanes, storms, fog)
• Complex surface conditions (areas covered by ice most of the year)
• Lack of equipment and infrastructure
• Complex operational conditions and high costs
• Short-term drilling activity (seasonality)
• Tough and inadequate infrastructures to respond to major accidents
• Unproven technology in such harsh climate conditions
• Low knowledge of industrial activity in the Arctic region
• Country-specific environmental laws to preserve animals and unique plants species
• Long process to get a permit for exploration and production

Although this is a fragile region, many major oil companies are approaching the Arctic to explore its untouched resources as there are some promising aspects for facilitating oil-drilling operations such as increasing technology developments and melting of sea ice due to global warming.

However, oil firms have different views on drilling for oil in the Arctic. On the one side, firms such as Total, believe that energy companies should not drill in Arctic waters as it may be too dangerous but on the other side, others such as Shell and Statoil are still planning to go ahead with operations in the near future.  In February Shell announced it wound not drill in the Arctic in 2013 as during this year the company will  strengthen its strategy and equipment.

Are companies ready to operate in this fragile region? Let us know your thoughts below.

If you’d like to learn more about the future of oil, why not attend our event, the World National Oil Companies Congress in London.

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Brazil’s oil industry is definite considered as a promising frontier, receiving strong interest from oil companies worldwide during the first oil auction since 2008 – where it raised $2.8bn.

39 oil majors from 12 countries participated with higher bid prices over the minimum offer price proposed by the National Petroleum Agency (ANP). The main bidders for both offshore and onshore exploration blocks were Petrobras, Total, BP and Statoil, which are highly committed to explore many concession blocks.

Tim Dodson, Executive Vice President for Exploration in Statoil said ‘the new positions (6 licences offshore) underscore our ambition to grow in Brazil, which we see as a region for long-term growth.’

This ‘long-term growth region’ is already the world’s 11^th largest oil producer but it should be in the top 5 by 2020. If in the past Brazil’s government failed to support oil investors, today the whole country is committed to maximise this opportunities which could turn Brazil into an oil power.

Will Brazil benefits from its huge oil and gas reserves? Will it become a top 5 producer?

Let us know your thoughts below.

Alternatively if you’d like to learn more about the future of oil, why not attend our event, the World National Oil Companies Congress in London.

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Lord Browne told HARDtalk’s Stephen Sackur of the huge gas reserves unlocked by fracking within the USA, saying it now represents 30% of American gas production.

The former BP executive said that it is worth continuing to pursue shale gas as he believes it will lighten the load of CO2 put into the atmosphere.

If you’re interested to know more about shale gas developments, why not attend our event, Shale Gas World Europe and Shale Gas World UK.

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Trade group Oil & Gas UK said that significant rises in investments into UK North Sea fields will yield an extra 470,000 MMbopd by 2017. That’s almost a 25% increase in four years from the current 1.5 MMbopd extracted from North Sea fields, attributable to a $2.4 billion increase in aggregate investment into the area over last year’s $17.6 billion. This year, 14 new oil fields are coming into production, creating what seems like the dawn of a new era in oil and gas output after a decade-long slump, the Financial Times reported.

New tax incentives to develop “awkward squad” fields may be the reason, particularly after the “£2 billion tax raid” on the country’s oil sector in 2011 when chancellor George Osborne raised marginal tax rates on North Sea operators to anywhere from 62% to 81%.

Now, the trade group says a series of tax allowances to promote exploration in tough fields is spurring new investment as companies seek to commercialize what have been up until now uncommercial projects.

The UK has seen more major investments in the North Sea lately, with the biggest project in over 10 years recently approved- Statoil’s $7 billion development of the Mariner heavy oil field. PLS recently reported BP and partners Shell, ConocoPhillips and Chevron’s activities in the $4.5 billion Clair Ridge project west of Shetland expected to produce oil until 2050. And French giant Total said it plans to invest up to $20 billion over the next five years in the UK North Sea, hoping to become the region’s top producer by 2015. Total’s optimism was probably nourished by the re-opening of its operated Elgin-Franklin fields in the Central Graben area after a yearlong shutdown due to a gas leak.

It also doesn’t seem as though potential Scottish independence is dissuading investment. Next year, Scotland will hold a referendum to decide if it breaks free from the UK. Currently, more than half of Scots polled are canty with the current arrangement, a fortuitous opinion for the UK as most of the remaining North Sea reserves are in Scottish waters. Scotland’s first minister Alex Salmond put a wholesale value on the reserves of more than $23 trillion and said, “There can be little doubt that Scotland is moving into a second oil boom.”

Ever since Queen Elizabeth II pushed the golden button that started the first oil flow through a pipeline from Cruden Bay to Grangemouth in November 1975, the UK quickly became dependent on the magical substance to supply tax revenues, roughly equal to ~27% of its GDP, the Financial Times said. Production peaked in 1999 at 4.5 MMboepd with steadily declining volumes to today’s 1.5 MMboepd. Oil & Gas UK’s chief Malcolm Webb said that considering the North Sea’s maturity, more spending is required to keep output stable.

This blog was originally posted on www.plsx.com and taken from the publication International Capital. For more articles, details about other publications and to subscribe please click here ›

Mr Eric Vaughan is speaking at the 2013 Shale Gas World UK Congress in Manchester. In the build up to the event we asked him for his thoughts on the shale industry.

Click the link and download our free ’Shale Insights Eric Vaughan’ to find out more.

Discover Eric Vaughan’s views on:

1. What the benefits for Europe in opening an unconventional portfolio are

2. How the industry deals with uncertainties in public perception towards shale development

3. How shale will impact upon the European energy portfolio

4. Where the greatest opportunities to replicate the US shale boom are

5. When Europe can expect unconventional production

Click the link and download our free ’Shale Insights Eric Vaughan’ to find out more.

If you’re interested in the UK development of shale, why not attend our event, Shale Gas World UK.

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· What are the benefits for Europe in opening an unconventional portfolio?

Energy diversity, energy security, jobs, taxes, revitalization of heavy industry

· How can we deal with uncertainties in public perception towards shale development?

Openness and honesty with the population, arrest politicians who are paid agents of Gazprom

· How will shale impact upon the European energy portfolio?

Energy security, energy diversity

· Where are the greatest opportunities for Europe to replicate the US shale boom?

Lithuania, UK, Poland

· What are the industry requirements for producing shale gas?

Low royalty, access to land, competent contractors with lots of the right equipment, money, money, money

· When can Europe expect unconventional production?

2-3 years in commercial amounts

Thomas Haselton is a Petroleum Geologist with 30 years experience
Graduated from Vanderbilt University with BA and MS in Geology, 1978.
Phillips Petroleum, 1978-1984
Exploration consultant, 1985-1998
Director Russian American Oil & Gas Technology Center, Tyuman, Russia, 1995-1996
Founder, Managing Director, Odin Energi A/S, 1991 to present. Odin Energi has hydrocarbon exploration and production licenses in Oman, Russia, Latvia, and Lithuania
General Manager UAB Minijos Nafta, Lithuania, 1998 to present

What do you think the potential of unconventionals are in the UK?

Will a balanced European portfolio lead to a US style Boom?

Let us know your thoughts by commenting below.

Alternatively if you are interested in the production of shale in Europe, or would be interested in meeting Thomas Haselton, why not attend our event Shale Gas World Europe at Warsaw in November?

Although Lebanon has been slow to explore its gas resources compared to most countries of the Levant such as Cyprus, Israel, Syria and Turkey – which have already started drilling operations – its gas reserves are not less profitable than those of the other countries with estimated 25 trillion cubic feet (TCF) gas resources.

The government is looking for investors for its 10 maritime exploration blocks to cut the cost of national energy, get revenue and consequently reduce the country’s public debt. International companies such as ExxonMobil, Shell, Chevron and Total have already gained approval to bid for offshore exploration licenses.

Apart from great commercial opportunities, there are many complications to be faced such as neighbouring countries (O&G Commercial Attractiveness vs. Political Uncertainty in the Eastern Mediterranean Region). How can the strategic balance in the region change? Will discoveries in Lebanon cause new regional conflicts?

Let us know your thoughts by commenting below.

Alternatively if you’d like to learn more about challenges in the eastern Mediterranean region, why not attend our event, the World National Oil Companies Congress in London.

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With reference to our E-book ‘15 Top Female Oil and Gas Executives’, today we discuss women in the oil and gas sector with a special guest: Elena Anisimova, Training and Development Manager at LITASCO SA (International Trading branch of LUKOIL).

1- Are women starting to break the glass ceiling in the oil and gas industry?

Personally I do not see that it is happening on a large scale. It is still pretty much a male dominated world,  though more women are ‘emasculating’ themselves to a degree to gain acceptance. We see the number of women is growing in  ‘traditional’ office positions, such as Accounting, Finance, Chemistry, HR, Communication rather than engineering for example. This is more of a general tendency across all workplaces and our industry is no different. I graduated from Russian Oil and Gas University in 2005. The technical faculties had a very limited number of young ladies in my time and we are yet to see this trend change.

2- What are the most common career developments for women within the oil industry?

I would say women have a bigger tendency to stay in the same business functions they would start from. A big jumps still a privilege for men. Of course, there are some cases where women have demonstrated a great ability and achieve success in many business areas proving by that women should be more open for such challenges.

3- What should oil companies do to attract more women?

I would not say that women requirements are very different from men. I believe changes will start happening only if the industry will make a concerted effort to support and attract more women. Cultural and social aspects are very important. For example, a popular movie where women would be presented as a hero working on the oil field and saving the ecosystem could help to attract  the attention of a new generation. Promotion of jobs and successful female case studies at schools and career events could also help attract more women to the industry.

Elena’s Anisimova’s Biography

Elena Anisimova is Training and Development Manager at LITASCO SA (International Trading branch of LUKOIL ) based in Geneva. She joined LUKOIL Group after graduating from Gubkin Russian State University of Oil and Gas in 2005. Spent 3 years  working  in HR upstream projects in Moscow and Kazakhstan specialising in benefits and organizational development. In 2008 joined LITASCO SA and was in charge of coordination with Headquarters on HR related issues. Since 2009, she has led Training and Development function, Performance management, work with young employees.

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If you’d like to learn more about unconventional resources in the United States, why not attend our event Shale Gas Monterey, taking place in October in Monterey California.

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It seems that the level of crude oil theft from western oil companies’ pipelines in Nigeria is decreasing thanks to Nigerian government intervention.

At the beginning of the year, Shell urgently asked Nigeria to increase security forces to stop growing oil theft and threatened to stop its operations in the country if measures were not taken. Crude oil theft already caused the company revenue losses of $10billion per year (Vanguard).

Vanguard reports that the Country Chair, Shell Companies in Nigeria, Mr. Mutiu Sunmonu said ‘we are seeing progress, but like I tell you, this is a very big operation, so I am not expecting solution over night, but what I am expecting is that government security agencies will really keep at what they are doing now. If they keep at it for a while, I am sure we will begin to see a significant reduction.’

According to the US Energy Information Administration, Nigeria is the 12^th biggest oil producing country in the world and the largest oil producer in Africa. Nigeria is a profitable oil area for many western oil companies such as Eni, Total, Chevron and as mentioned Shell. However, this is a trouble region for oil players due to criminal parallel organizations, oil theft and consequently frequent closures to repair oil facilities.

Will Nigerian government manage to prevent oil theft?

Let us know your thoughts below.

If you’d like to further discuss oil in Africa, why not attend our World National Oil Companies Congress in London.

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