Oil Investment in Arctic Unlikely

Oil Investment in Arctic Unlikely
Oil Investment in Arctic Unlikely

Oil companies are unlikely to invest in Arctic drilling in the short run as energy prices remain low, but will not turn away from the region in the long run, former US assistant secretary of energy, Chuck McConnell, said on Monday.

Oil prices have fallen to approximately $40 per barrel down from $100 a barrel in summer 2014 due to excess supply led by the US shale oil boom and steady production in Saudi Arabia, Sputnik reported.

In the short run, he added, “Arctic drilling is not likely to be necessary or important to meet global demand for oil.”

McConnell stressed that in the long run, oil companies will continue to work on Arctic issues and develop technologies to find and extract energy.

“I think Arctic drilling and the Arctic oil and the geology there is so large that companies will continue to stay active enough so that the awareness and the development of that area as a potential future will remain,” he said.

Arctic drilling presents unique technical, environmental and transportation challenges to the global oil industry.

White House Press Secretary Josh Earnest praised US cooperation with Russia over the management of Arctic resources during US President Barack Obama’s flight to Alaska to attend an international conference in Anchorage on global warming.

The spokesman indicated that the US government was willing to expand its environmental and resource cooperation with Russia in the region.

"We have seen a pretty cooperative effort on the parts of these nations to ensure that resources in the Arctic are effectively managed," he said. "And we continue to urge not just Russia but other countries with interest in the Arctic to continue to pursue that effective cooperation."

Obama has been heavily criticized by environmentalists for approving Shell’s drilling for oil in the remote Arctic region, but he is also under fire from major US energy corporations for preventing wider oil drilling in environmentally protected regions.