Payday Loans

Research Topics

Actors and patterns of cooperation and conflict
Russia, Norway and the High North - Past, Present, Future
The United States in the 21 Century Arctic
Defining an Interest: The European Union and the High North
The Power of Energy
Law of the Sea and Ocean Governance
Climate Change and Environmental Protection

The power of energy


This project will study the geopolitical significance of the energy resources in the High North.
The volume of petroleum extraction in the High North might rise substantially in the course of the next decades. Russia is first in line to develop major new resources, but the estimates for other regions – in Canadian, US, Danish, and Norwegian waters – are significant, if still highly uncertain.


At the same time, increasing demand for energy worldwide, especially in developing economies, and threats to the stability and security of existing supplies of energy, make exploration of Arctic energy resources important. There is reason to assume that the energy resources in the Arctic are significant even seen in a global perspective, and many politicians and observers are of the opinion that the region will assume great importance in global thinking on energy security. The following sets of questions will be of particular interest to the Work Package:


• How does the Arctic compares with other energy regions both politically and economically? Extraction costs, infrastructure, transportation and environmental and climate impacts are all important factors.

• What are the oil companies’ interests and attitudes towards the energy resources in the High North? We foresee vivid participation and dialogue with commercial actors in this project.

• Energy rich regions are usually seen as infused with political conflicts. Building on findings from research within other parts of the Work Package, an empirical comparison of the High North oil region with political cooperation and conflict in other energy regions will be conducted.

• The falling costs of liquefied gas transportation shows signs of integrating different regional gas markets. This is of importance for the economic viability of gas resources in the High North. To sell gas profitably, High North gas would either need to displace existing gas deliveries to Europe, or find new market, presumably using tankers to transport the gas overseas. The study of the geopolitical aspects of the gas resources of the High North will be related to this strategic condition. 





Expert comment:
 According to the Russian gas company Gazprom the development of the gigantic Russian gas field Shtokman will probably be delayed, with reference  to gas market conditions. The field is regarded as the central element of Russian-Norwegian petroleum cooperation in the High North. But how will the world economical crisis affect Shtokman?

by  Arild Moe, Deputy Director at the  Fridtjof Nansen Institute and participant in the GeoPolitics in the High North programme. 

According to plan, the final decision on the gigantic Shtokman development will be taken in early 2010. Until then, continued surveys, development of technical solutions, tender invitations and finalisation of the contract negotiations within the operating company Shtokman Development AG will be on the agenda. Shtokman Development AG is owned by the Russian state dominated energy giant Gazprom (51 per cent), French Total (25 per cent) and Norwegian StatoilHydro (24 per cent). These companies will altogether have spent close to a billion dollars on the preparations before finally deciding whether to go ahead.  

A changed world
The companies would of course not have started their work – and spent so much money – if they did not believe in the project. But as we know, the world has changed significantly since the beginning of last year. How does the world economy affect Shtokman? The price of oil is important because the price of gas is linked to it. Currently the oil price is less than half of last year’s peak. Nevertheless, today’s oil price of about USD 60 is not significantly lower than it was when StatoilHydro decided to join the project in autumn 2007.

And it is not today’s price that is decisive, but what price that can be expected the day the field is in production. There is considerable uncertainty, but most analysts believe the price will increase over the coming years. 

Demand for gas from different suppliers is not solely determined by price. The reputation of Russian gas – being the cornerstone of European gas supplies – has suffered in recent years due to the gas conflicts between Ukraine and Russia, which significantly affected countries in Western Europe. The EU countries are now working intensely to reduce the dependence on Russian gas. 

This may have consequences for the Shtokman gas. From a Russian point of view it will contribute to European energy security as the gas will be delivered either through a pipeline under the Baltic Sea or by ship. Both export options avoid problems with Ukraine. But from a European perspective the main problem is dependence on Russian gas itself. The political insecurity combined with the economic crisis, which decreases estimated gas demand, makes Russian gas harder to sell. 

Consumption is plummeting
In the short term the most striking development is in the domestic Russian gas market. The crisis in the economy has made Russian gas consumption plummet. In order to meet reduced demand, Gazprom has signalled production cuts of close to 100 billion cubic metres this year, a volume equal to the total production on the Norwegian shelf. Shtokman’s first phase, where the foreign companies are participating, will according to plan be producing 23 billion cubic metres per year. 

The insecurity in the export markets and the dramatic fall in domestic demand could make it reasonable to assume that the development of new fields will not be prioritised. The Shtokman, however, should be viewed in a more long term perspective. Even though Russia will have a surplus of gas over the next few years, this will change in not so many years. Three of the four giant fields, presently the core of Russian gas production, are declining and in need of replacement. 

But Shtokman is not the only field that can be used to maintain Russian gas production in the future. The development of the fields on the Yamal peninsula is more important. And despite the efforts of importing countries to find alternative gas providers, Russia will be the most important source of gas in the foreseeable future. 

The development in the world economy and the energy market has not made Shtokman irrelevant, but less urgent than it was a year ago. How much less urgent is impossible to say without access to Gazprom’s internal calculations. But reduced urgency allows the project more time, something signals from Gazprom indicate.  

The final decision on investment will depend on a number of technical and commercial considerations made by the participating companies. But the project must also be perceived as attractive for Russia more broadly, both in the long and short term, in order to receive the broad political support necessary for the development. This means that the level of local content in the development of the field may be decisive if the project is to maintain the level of political support it need for smooth implementation. The big challenge is to reconcile such considerations with the technical and economic requirements of the project. 

This is an English version prepared by IFS of an article that was first printed in Nordlys 24 July 2009.

Preliminary findings – Work package 5 The power of energy (January 2011 by work package leader Dag Harald Claes, UiO)

Research on the strategies of major oil companies in the Arctic has been carried by way of literature search and interviews in key companies. Preliminary findings are that these companies are less aggressive in their pursuit of Arctic resources than what is commonly assumed in the ‘resource race literature’ and also that the companies see scope for collaboration, not only competition. At least in the shorter term the rising expectations for unconventional gas reserves onshore have dampened interest in the Arctic offshore (Moe and Guldbrandsen, forthcoming).

In the longer term a scenario of "a new cold war" and "a mad dash” for resources is no more likely than a scenario forecasting low economic activity and low future commercial and political interest in the Arctic oil and gas resources.  The unevenly distribution of resources implies that future development of Arctic oil and gas might contribute to diversification of supply in terms of regions, but not states (Offerdal 2010).

Future research on Arctic oil and gas issues should include studies of political and economic factors in selected sub regions of the Arctic, as we assume different drivers and dynamics behind oil and gas activities in various part of the Arctic. In a case study we found the Russian Arctic gas resources as having double-edged implications for European energy security, as new Russian resources adds to the global reserve base – to the economic benefit of consumers, but the same time they can increase European dependency on Russia – to the geopolitical disadvantage of the gas consuming countries (Claes and Harsem 2010).

This relates to our conceptual study of energy security. Here we found the public debate and political strategies to increase security of energy supplies to be based on an out-dated understanding of global energy markets, uninformed by the more complex relationship between geological, economic and political factors. In our study we thus disentangled the various aspects of the concept of energy security in order to provide a more nuanced understanding of how structural changes (both political and economic) influence constraints and opportunities for achieving energy security, the mechanisms involved, and the policy implications that follows (Claes 2010).



Energy security is back on the international political agenda and the European-Russian energy game is complex. In this new working paper Dag Harald Claes (University of Oslo) and Øistein Harsem (University of Tromsø) discuss the political factors which make the Arctic energy resources, in particular natural gas, increase or decrease the energy security of Europe.

By drawing from existing literature about ‘economic statecraft’ we will show that natural gas can, through decision makers, play an important role in the future energy supplies to Europe, however, there are important political roadblocks, in addition to geological, technological and economic challenges. 

Are Arctic energy resources a curse or a blessing for European energy security? Click here to download the working paper



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Norwegian Institute for defence Studies CSIS Fritjof Nansen Institute Stiftung Wissenschaft und Politik University of Tromsø Moscow State Institute of International Relations (University) of the MFA of Russia University of Oslo Institute of general history Norwegian Defence Research Establishment Econ Pöyry
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