(Oil Price) – The United States and Canada are expected to announce they have agreed to begin negotiations over overlapping territorial claims in the Arctic, an area that has drawn increased interest from China and Russia, Bloomberg reported on Tuesday, citing an anonymous source with knowledge of the matter.
The United States and Canada are disputing the Arctic seabed in parts of the Beaufort Sea which is believed to hold huge oil reserves. The two neighbors and allies have overlapping claims over the seabed north of Alaska, Yukon, and Northwest Territories.
The two countries are expected to announce the start of talks to finally delineate their maritime boundary in the Beaufort Sea.
The original source of dispute is a wording of an Anglo-Russian treaty from 1825, the rights of which were later inherited by the U.S. and Canada later in the 19th century.
The U.S. and Canada are now looking to work collaboratively to negotiate and clarify the maritime boundary in the Beaufort Sea.
The agreement comes at a time in which both China and Russia are looking at Arctic territories as they seek to explore more resources and trade routes in the Arctic.
The U.S. Geological Survey (USGS) estimated more than a decade ago that the entire area north of the Arctic Circle could contain an estimated 90 billion barrels of undiscovered, technically recoverable oil, in the first such assessment back in 2008. The area north of the Arctic Circle is also considered to hold 1,670 trillion cubic feet of technically recoverable natural gas. A total of 44 billion barrels of technically recoverable natural gas liquids in 25 geologically defined areas are thought to have potential for petroleum, according to USGS.
However, Arctic drilling has been a very sensitive topic in recent years and many oil companies are unwilling to take chances to explore for petroleum in harsh environments where governments could pull the plug on oil and gas drilling.
By Tsvetana Paraskova for Oilprice.com
