In a year when there is no arctic drilling activity in North America, the Russian head of state-run run OAO Rosneft announced it has discovered what may be a treasure trove of black oil - a 9 billion barrel ($value ~ $900 billion) discovery in the Kara Sea.
The well was discovered with the help of America’s biggest energy company. As Bloomberg explains “the well was drilled before the Oct. 10 deadline Exxon was granted by the U.S. government under sanctions barring American companies from working in Russia’s Arctic offshore. The only way to reach the prospect is a four-day voyage from Murmansk, the largest city north of the Arctic circle. Everything will have to shipped in — workers, supplies, equipment — for a few months of drilling, then evacuated before winter renders the sea icebound. Even in the short Arctic summer, a flotilla is needed to keep drifting ice from the rig.
Output from the Kara Sea field could begin within five to seven years.The Kara Sea well—the most expensive in Russian history—targeted a subsea structure named Universitetskaya and its success has been seen as pivotal to that strategy. The start of drilling, which reached a depth of more than 2,000 meters (6,500 feet). The importance of Arctic drilling was one reason that offshore oil exploration was included in the most recent round of U.S. sanctions. Exxon and Rosneft have a venture to explore millions of acres of the Arctic Ocean.
It is noteworthy that crude oil prices have slid below $100, in part from the amazing discoveries in the United States through new technologies.
The newly discovered oil deposit in the Kara Sea is vast, but will be very expensive to develop.