Natural Gas

The map of the Arctic Ocean may look a little different very soon.

The five Arctic nations, meeting in Greenland, are looking for ways to settle a series of territorial disputes over region — which by some estimates could contain a quarter of the world’s undiscovered oil and natural gas reserves.

Settling in at the table like hungry relatives at a Thanksgiving dinner to stake their claims are representatives from Canada, Denmark, Russia, Norway and the U.S. Playing the role of peacemaker, Denmark called for the meeting in the town of Ilulissat, Greenland, to stop what could become a nasty fight over who has claim to what in the Arctic.

The meeting was called after Russia angered the other Arctic nations by laying claims to a huge expanse of the Arctic region by planting its national flag on the seabed under the North Pole. What’s pushing the sense of urgency for this meeting are rising temperatures that could leave the Arctic Ocean ice-free during the summer in only a couple of decades. A study by the U.S. National Science Foundation and NASA suggests that this could occur by 2040.

And that, according to Peter Sterling, chief executive officer for Las Vegas-based Arctic Oil & Gas, means a chance for improved drilling access in the Arctic Ocean. It also means an open Northwest Passage, allowing tankers to take thousands of miles off their journey from the East Coast of the US or Europe to the Pacific.

Under the generally accepted 1982 UN Law of the Sea Convention, nations own the seabeds out to 200 miles if it is part of a continental shelf. Under the current law, there are a number of claims that overlap each other and some areas that aren’t claimed by any of the Arctic nations.

A preliminary assessment by the U.S. Geological Survey suggests that the Arctic seabed may hold as much as 25% of the world’s undiscovered oil and natural gas. And Sterling said that competition to lay claim to this wealth by nations and private companies like his will only intensify as the region becomes more accessible and the price for oil and natural gas continues to rise.

Sterling’s company has laid a claim to millions of acres of the Arctic Ocean and has called the Russian claim bogus at best. Arctic Oil & Gas has filed its claim with the UN and all five of the Arctic nations — but only Canada responded by saying it doesn’t recognize the claim. That hasn’t stopped the US company from hiring experts in Arctic research and looking for venture capital from sources in Europe. He said the next phase will include seismic surveys under the ice.

That should take place well after the meeting in Greenland has been completed.

John A. Sullivan, News Editor, Oil and Gas Investor, www.OilandGasInvestor.com, jsullivan@hartenergy.com

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