Wednesday, November 25, 2009
Last spring Canada Southern Petroleum, a company with significant reserves inside the Arctic Circle, received a takeover offer of $7.50 per share, nearly a 60 percent premium on its stock price. By the time the company was sold four months later to another Canadian firm, it went for $13.10 a share.
While there is drilling in the Arctic on or close to shore, the sea under the polar cap is unlikely to remain largely untapped for long - governments and corporations are racing to carve up the Arctic oil pie.
A new petroleum province will likely be needed if the world is going to both replace the output from current fields, many of which are declining, and keep up with worldwide oil demand that is expected to surge by more than 50 percent over the next 25 years. This underlay the tripling of oil prices since 2002.
BP (Charts), which operates the huge Prudhoe Bay field in Alaska, signed a $17 billion exploration agreement with Russia.
Statoil, Norway's state oil company, considered to have some of the best cold-weather expertise in the business from its North Sea operations, is well positioned to explore massive deposits believed to lie north of Norway in the Barents Sea.
Royal Dutch Shell (Charts), ExxonMobil (Charts), Chevron (Charts) and ConocoPhillips (Charts) have interests as well.