Oil and Gas

of the world’s commercial oil supplies
of the world’s commercial natural gas supplies
90 billion
barrels’ worth of oil reserves
1,670 trillion
cubic feet of natural gas reserves


Supplying roughly 10 percent of the world’s commercial oil supplies and 25 percent of the world’s commercial natural gas, the Arctic is known for its enormous reserves of fossil fuels – one of the primary reasons for the region’s immense economic attractiveness and an important driver of the local economy. Billions of cubic metres of fossil fuels have been extracted in the Arctic since the mid-twentieth century.

A 2008 US Geological Survey report estimated that “about 22 percent of the undiscovered, technically recoverable resources in the world” lie above the Arctic Circle in the amount of 90 billion barrels’ worth of oil reserves, 1,670 trillion cubic feet of natural gas reserves, and 44 billion barrels’ worth of natural gas liquids (NGLs). Reserves are largely concentrated in three parts of the Arctic – the Beaufort Sea, the northwest of the Russian Arctic, and the Canadian Arctic Archipelago – but exist across the region. Reserves and production volumes vary considerably by country.

Various initiatives are underway to foster a culture of responsible resource exploration in the Arctic. For instance, the Arctic Economic Council’s Responsible Resource Development Working Group is working on developing such a framework by looking into the best business conduct practices for overcoming challenges, navigating investment conditions, and meeting the needs of the Arctic’s indigenous communities.

Production figures

Responsible for over 90 percent of the local market, Russia dominates petroleum production in the Arctic from both onshore and offshore reserves. Onshore supplies come from the Yamal-Nenets Autonomous Okrug (the site of the Novoportovskoye oil and gas condensate field), the Khanty-Mansi Autonomous Okrug, and the Komi Republic, while offshore supplies currently come from the Prirazlomnoye field, which, opened in 2014, is situated at depth of 20 metres in the Pechora Sea. Russia also has a huge share of undiscovered gas resources, nearly 90 percent of which are offshore. Nearly all of Russia’s current gas production takes place at the Bovanenkovo gas field in the Yamalo-Nenets Autonomous Okrug. The peninsula is also the site of the Yamal LNG project, which is fed by the Yuzhno-Tambeyskoye gas field. The as-of-yet undeveloped South Barents Basin-based Shtokman gas field – one of the largest in the world – is also considered a promising production site.

In Alaska, oil production has been in decline for years and today mainly takes place on the North Slope, which, together with neighbouring sites in the Arctic Ocean, has over 90 percent of Alaska’s undiscovered gas reserves. Despite decades-long opposition to drilling in Alaska’s Arctic National Wildlife Refuge and growing environmental concerns, land leases were auctioned in January 2021.

Greenland has nearly one-sixth of the Arctic’s undiscovered petroleum reserves, though none have been proven profitable and recoverable. Licenses for continued exploration and possible extraction have recently been granted, nevertheless.

Iceland’s northern area of Gammur and northeastern area of Dreki, on the other hand, are believed to have commercially viable oil and gas reserves and, with a Strategic Environmental Assessment now completed for northern Dreki, exploration and production may be forthcoming.

Oil production in Norway’s Draugen field (the Norwegian Sea) and Goliat field (the Barents Sea) started in 1993 and 2016, respectively. Another Barents-based field, Johan Castberg, is set to start operating in 2023-2024. Norway also produces gas at the Snøhvit field, which is based in the Norwegian Sea.

While Canada produces significant volumes of oil and gas, very little comes from the Arctic. The low levels of gas produced in the Canadian Arctic have no largescale commercial importance and are used locally.

Sweden imports oil and gas and its government recently proposed a ban on fossil fuel extraction altogether, while Finland has no known reserves of fossil fuels.

Photo: Leonid Ikan/IStock

You may be interested