Sunday, August 30, 2015

Shell Swims Against Oil Price Tide

Popular protest is one problem for Shell – the price of oil is another. (Image Credit: Dennis Bratland via Wikimedia Commons) Click to Enlarge.
It’s a gamble – some would say a giant gamble.  Before even one liter of oil has been found, the Anglo-Dutch Shell group is believed to have spent more than US$7 billion – just making preparations for its latest Arctic venture.

Shell is betting on finding the oil industry’s Holy Grail: according to 2008 estimates by the US Geological Survey, the Arctic contains more than 20% of the world’s remaining hydrocarbon resources – including at least 90 billion barrels of oil.
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As recovery from shale deposits becomes more difficult and prices remain low, fracking is not enjoying the explosive growth it saw a few years ago.

Some drilling sites in the US states of Texas and North Dakota are being abandoned. Several of the smaller fracking companies – which borrowed large amounts during the good times to finance their operations – have gone bust.

But there is still a global glut of oil:  the International Energy Agency says there is unlikely to be a rebound in oil prices any time soon.

The drilling season in the Arctic is brief:  the days shorten quickly and the ice begins to form. Shell – and its shareholders – will be hoping for quick returns.

International negotiators preparing for the climate summit in Paris later this year are calling for urgent action to head off global warming.  There are many who hope Shell’s exploration activities will not succeed – and that the Arctic hydrocarbons stay where they are, thousands of feet below the seabed.

Read more at Shell Swims Against Oil Price Tide

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