Total SA says energy companies should not
drill for crude in Arctic waters, marking the first time an oil major has publicly
spoken out against offshore oil exploration in the region.
Christophe
de Margerie, Total's chief executive, told the Financial Times the risk of an
oil spill in such an environmentally sensitive area was simply too high.
"Oil on Greenland would be a disaster," he said in an interview.
"A leak would do too much damage to the image of the company".
Last
week, Royal Dutch Shell had to postpone until next year an attempt to drill
into oil-bearing rock off the Alaskan coast after a piece of safety equipment
was damaged during testing. It has spent $4.5bn and seven years preparing to
drill.
ExxonMobil,
ENI of Italy and Norway's Statoil have also signed deals to explore for oil in
Russia's Arctic waters, while others have secured licences to drill off Greenland.
Mr de Margerie
emphasised that he was not opposed to Arctic exploration in principle. Total
has a number of natural gas ventures in the region, including a stake in the
vast Shtokman field in Russia's Barents Sea. The Total chief executive said gas
leaks were easier to deal with than oil spills.
His
comments were welcomed by environmental groups that are opposed to Big Oil's
presence in what they see as a near-pristine wilderness.
"The
rest of the oil industry should heed his warning," said Ben Ayliffe, head
of Greenpeace's Arctic campaign. "Given the risks, companies shouldn't be
touching the Arctic with a barge pole."
Shell
declined to comment. It has said in the past that it is well prepared for
spills, with round-the-clock response teams on Alaska's North Slope and a fleet
of specialised vessels that will be in place before drilling starts.
According
to a 2008 study by the US Geological Survey, the Arctic contains just over a
fifth of the world's undiscovered, recoverable oil and gas resources. The
melting of the polar ice cap has made the area more accessible to the majors
than ever before.
The
region's challenges are formidable, however, ranging from icebergs the size of
cities to storms, darkness and fierce cold. There is also no certainty of success:
UK-listed explorer Cairn Energy spent $1bn exploring off Greenland and failed
to find commercial volumes of oil.
Total's
Arctic projects are concentrated in Russia. As well as its stake in Shtokman,
it has interests in a number of onshore developments, such as a big liquefied
natural gas venture in Russia's far north known as Yamal LNG. It also operates
a Siberian oilfield called Kharyaga.
Gazprom
announced in August that it was shelving Shtokman due to excessive costs. But
Mr de Margerie said as far as he was concerned, it was still on. "Gazprom
never told me in writing that the project is over," he said.
"Discussions are not ... as active as I would like. [But] the reserves are
still there."
By Guy Chazan, FT.com September 26, 2012
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