One of the worldâ€™s largest untapped oil drilling frontiers is now officially open for business. In a landmark deal struck between oil giant ExxonMobil and Russiaâ€™s Rosneft, the Arctic Kara Sea off the coast of Russia will be the host of oil exploration and drilling operations in the coming years.
The deal was signed in the Black Sea resort of Sochi in the presence of Russiaâ€™s Prime Minister, Vladamir Putin. Putin expressed optimism about working with a large Western company, as it allowed â€œnew horizons to open up [as] ExxonMobil started to work on Russiaâ€™s strategic shelf and deepwater continental shelf.â€
First in line for development are the East Prinovozemelsky Blocks 1, 2, and 3 in the Arctic Kara Sea, and the Tuapse licensing block in the Black Sea. The total investments for these areas are projected to reach $3.2 billion altogether. But Exxon is optimistic that the investment will pay off, as it describes the proposed oil development areas as â€œthe most promising and least explored offshore areas globally.â€
Therefore, in a strictly monetary sense, the Arctic could be the host of extraordinary development over the next few years, as other companies move in to cash on the regionâ€™s expanse of untapped resources. One projection by the US Geological Survey suggested that up to one-fifth of the worldâ€™s oil natural gas resources could be located in the Arctic.
The opportunities for profit are simply too alluring to ignore â€“ and especially since a larger area of the Arctic is now ice-free in the summer thanks to global warming.
The Arctic bordering countries see dollar signs in their eyes despite warnings from the scientific community about the necessity to stop global warming and prevent further Arctic ice melt. In fact, the latest Arctic Council meetings turned into a political struggle over which resource-rich sections of the Arctic belonged to which countries.
But there is more than global warming at stake here.
Drilling for oil in the ecologically sensitive Arctic could be immensely destructive to the local geography of the area. Not only does oil drilling disrupt wildlife, it could be potentially disastrous in the instance of an oil spill. If the spill happened in winter, clean-up efforts would have to take place under perpetual darkness.
What are your thoughts on oil drilling in the Arctic? Are there any effective ways to convince Arctic countries to avoid exploiting the Arctic for its resources?
Image credit: NOAA Climate Program Office:Â Arctic Ocean, Russia