Oil Firms Unlikely to Invest in Arctic Amid Low Prices

Oil companies are unlikely to invest in Arctic drilling in the short-term as energy prices remain low, but will not turn away from the region in the long-term, former US Assistant Secretary of Energy Chuck McConnell told Sputnik on Monday.

ANCHORAGE (Sputnik) – 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.

“Oil companies will not turn away from that [the Arctic], but they will probably not be investing in it at least short- term,” McConnell said.

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

McConnell stressed that in the long-term 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 explained.

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