The oil and gas industry has demonstrated the ability to drill and develop offshore oil and gas resources in first-year sub-Arctic ice and in shallow-water high-Arctic environments. However, development in deep water (water depths exceeding 100 m) remains a formidable challenge due to small, unpredictable open-water windows and large environmental loads from multi-year ice features. This paper provides an overview of recent projections of undiscovered Arctic hydrocarbon resource potential and the geographical distribution of the resource potential thought to lie in deep water. The unique environmental conditions are summarized along with their impact on the cost of supply outlook for Arctic resources relative to other hydrocarbon supplies. The key technical challenges facing deep-water high-Arctic development are reviewed along with the current industry efforts aimed at meeting the challenges.

INTRODUCTION

According to a 2008 Circum-Arctic Resource Assessment by the U.S. Geological Survey (USGS) (Bird et al., 2008), the Arctic could hold about 22% of the world's remaining undiscovered hydrocarbons. Resource projections such as these, coupled with diminishing supplies of conventional oil resources and higher oil prices, have resulted in intensified acreage acquisition and exploration activities in the Arctic. Arctic exploration is expanding well beyond the shallow-water depths of current industry production experience, which is limited to bottom-founded structures and gravel islands in depths less than 40 m. In fact, much of the undrilled prospective acreage lies in socalled deep water, that is, beyond the 100-m water-depth contour). The expanding search into the deep-water Arctic is to some extent underpinned by industry confidence that the necessary enabling technology will emerge if the prize is large enough. Such confidence is supported by industry's long-standing record of overcoming major technological hurdles to safely and economically produce large hydrocarbon accumulations in harsh environmental conditions around the globe.

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