Alaska Drilling Map

Shell says that it expects the 410 Alaskan offshore leases it holds in the Arctic to become the company’s biggest source of crude oil globally within 10 to 20 years. Were it to capture just a 10th of the oil in the Chukchi and Beaufort seas, Shell would, over time, add 2.7 billion barrels to its proven reserves. To put that number into perspective, Shell’s total proven reserves of oil stood at 4.3 billion barrels at the end of 2011. Given Shell’s perpetual need to find new reserves large enough to replace what it pumps, the company must aim high when it comes to exploration, says Clint, the Bernstein analyst. “Adding 200 million barrels in new reserves doesn’t move the needle for an oil company as big as Shell,” Clint says. “They really have no choice but to push into the big, unexplored basins like the Arctic.”

Fortune Magazine, May 2014