Anchorage Daily News

Russia's Arctic Ocean shelf could hold 580 billion barrels of oil equivalent in place, with a substantial component of that resource consisting of natural gas. That would amount to 25 percent of the world's remaining hydrocarbon potential, a Russian energy professor said in a recent Anchorage lecture.

Anatoly Zolotukhin, deputy rector on international affairs at Gubkin Russian State University of Oil and Gas, said the Barents Sea over eastern Russia might hold 210 billion barrels of equivalent.

Just to the east of the Barents lies the Kara Sea, which could hold 280 billion barrels. The remainder of the reserves is distributed among the Laptev, East Siberian and Russian Chukchi seas, which lie farther east, Zolotukhin said.

This year Shell Oil bid more than $2 billion for rights to explore for oil and gas in the U.S. portion of the Chukchi, off Alaska's northwest coast.

Zolotukhin spoke to a meeting of the International Association for Energy Economics in Anchorage as part of a series of talks in the state as part of the International Polar Year.

Although Russia is rich in hydrocarbon resources, economic growth and insufficient oil and gas reserves replacement are driving a need for new oil and gas exploration, Zolotukhin said. Estimated Russian resources amount to about 150 years of supply, if production were to remain at 2006 levels. But reserves growth through exploration would need to be 31 percent higher than production every year to maintain a production growth of 4 percent a year, he said.

That need for new reserves is turning the exploration spotlight onto the Arctic offshore -- recently Russian state-owned companies Rosneft and Gazprom announced they will develop Russia's Arctic continental shelf, Zolotukhin said. Rosneft tends to focus on oil development, while Gazprom focuses on gas.

"(But) when we talk about the resource potential of the Russian Arctic we talk about (resources) yet to discover, yet to define," Zolotukhin said.

And exploration of Russia's Arctic offshore has hardly begun, he said, comparing the status of Russian offshore exploration with that of Norway. The Norwegian continental shelf has about 5,000 exploration wells compared with only about 200 on the Russian continental shelf, Zolotukhin said. There are only perhaps six wells in the whole of the Kara Sea and no wells in the eastern Arctic seas, he said.

Development of the offshore region faces formidable challenges.

Rosneft chief executive Sergei Bogdanchikov has said that an investment of $2.64 trillion -- 2.5 times the Russian gross domestic product in 2007 -- will be needed to develop the Russian Arctic shelf between now and 2050, Zolotukhin said.

Seismic surveying and exploration drilling would require $680 billion, with the remainder of the investment funding oil and gas development activities.

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