Arctic Oil & Gas Market Outlook

Infield Systems' first Offshore Arctic Oil and Gas Market Report provides a comprehensive state of play regarding the oil and gas scene in this frontier region though to 2017. As well as providing detailed research and analysis of current and future offshore oil and gas developments within the Arctic circle, the report also includes research and analysis of developments in three major 'sub-Arctic' regions as well; being Sakhalin Island offshore Far East Russia, the Jeanne D'Arc Basin offshore Eastern Canada (Newfoundland and Labrador) and the Cook Inlet in Alaska.

According to Infield Systems there are over 130 billion barrel of oil equivalent (BOE) in already discovered oil, gas and condensate reserves in offshore Arctic and sub-Arctic regions. Approximately 114 Bboe of this are offshore gas reserves, or 86% of total reserves, and around 16 billion bbl are oil reserves. According to Infield Systems' estimates, no less than 99 Bboe of these reserves are discovered natural gas fields located in the Russian offshore Arctic region (not including the sub-Arctic Sakhalin Island area).

Infield Systems has identified 147 discovered fields, with only 25 these fields actually currently producing in the offshore Arctic and sub-Arctic regions. With just a further 13 fields either with a firm plan or under development the bulk of these offshore discovered fields are still many years from development; reflecting that the Arctic region's offshore oil and gas development is still in its very early stages with much potential for output growth yet to be realised. The vast majority of fields, or 101, are classified as 'possible' in terms of development status. Therefore many fields are not expected to be developed until the longer term, yet the resource potential in the offshore Arctic is substantial should the infrastructure requirements be made.

Indeed Infield Systems expects capital expenditure in the Arctic region to increase steadily throughout this decade, rising year on year to over USD7bn by 2017. With significant reserves, Russia is expected to drive expenditure in the region throughout the forecast period, especially in the years 2013-2015 (due mainly to the Shtokman project).

The Shtokman field is due to come on stream in 2016, and with reserves of over 24bn boe, will account for a large proportion of Russian Arctic expenditure over the next decade should this project proceed as scheduled. Further development of Sakhalin Island and other projects expected to be developed also contribute to Russia's large share of Capex.

Canada may experience a sustained rise in expenditure after 2013, including for activities associated with fields in sub-Arctic offshore Newfoundland, and, should some currently speculative projects proceed, smaller fields in the Canadian Arctic Islands as well.

Norway's Barents Sea fields of Snohvit and Goliat will contribute to sustained expenditure as well. The remaining Arctic regions of Greenland (Denmark) and the US (Alaska) are expected to contribute modestly to development expenditure. In these regions more expenditure is likely to be concentrated on further exploration.

The report also provides a comprehensive Arctic offshore oil & gas field and development profile for Russia, US (Alaska), Norway, Canada and Greenland, which includes analysis of licensing policies in each country on offshore Arctic exploration and development. As a result the report provides a broad overview of the Arctic offshore oil and gas scene, from licensing of blocks to the provision of infrastructure.