The Arctic – The Final Frontier For Energy Companies?

It is for this very reason that oil and gas companies have been refocusing their efforts on the region in recent years, with decidedly mixed levels of success.

Statoil, for example, earlier this year made what it described as one of the most important finds on the Norwegian Continental Shelf in the past decade. Located around 100 kilometres north of the Snohvit gas field in the Barents Sea, the Skrugard Prospect has an estimated volume of between 15 and 250 million recoverable barrels of oil equivalent (boe).

In contrast, Cairn Energy has been forced to deal with successive disappointments with its drilling programme in Greenland, which has also been dogged by environmental protestors intent on stopping exploration in the region.

The company said it remains committed to the region, despite announcing in September its Gamma-1 Well encountered no reservoir or hydrocarbon shows and its Delta-1 Well produced only minor hydrocarbon indications. Delta-1 marked the third dry well which had to be abandoned this year and came as the Arctic drilling window neared its close as the harsh winter drew in.

On top of this, Cairn has been dealing with a Greenpeace protest, which included campaigners occupying its Edinburgh headquarters and 20 protestors boarding its Leiv Eiriksson oil rig.

For others, their journey down the road to Arctic oil production has barely even begun. Questions on the environmental impact of drilling have thrown a spanner in the works of Shell's plans to drill up to ten wells in the Chukchi and Beaufort Seas in Alaska over the next two years, although the plans are once again on track following the granting of the final air quality permits needed.

The US Environmental Protection Agency finally granted permission for Shell to operate the Discoverer drillship and a support fleet of icebreakers, oil spill response vessels, and supply ships for up to 120 days each year, putting the company on track to begin drilling in the region in the summer of 2012.

However, the permits contain stricter restrictions than those initially issued in 2010, after challenges were made by North Slope communities and environmental groups to the Environmental Appeals Board. The new permits require Shell to reduce its fleet emissions of most key air pollutants including fine particulates and nitrogen dioxide by more than 50 per cent on the original licences.

Spokesman Curtis Smith said Shell remains confident it will be able to commence drilling next year, but this is unlikely to be the last of the delays for those hoping to make an entry into the Arctic region.

In the wake of the Deepwater Horizon disaster, oil spill response has been placed under greater scrutiny. Environmental groups argue that a spill would be almost impossible to clean up during the icy winters and such an event causes irreparable damage to wildlife and the native communities in the region.

Following the announcement from the Obama Administration that it will be going ahead with Chukchi Lease Sale 193, the administration was criticised by a host of organisations for ignoring a report from the US Geological Survey claiming there is information missing which makes it difficult to make a fully-educated decision on exploration in the region.

The movement approves 500 licences in the Chukchi Sea, but an open letter signed by groups including the World Wildlife Fund and the Alaska Wilderness League calls into question spill response.

"If an oil spill were to happen in the Arctic's extreme, remote conditions, there is no proven method and almost no resources available to clean it up. This fact has been affirmed by administration officials themselves," the letter reads.

This fact leads into perhaps another of the key challenges for those looking to explore the Arctic's significant reserves,  on top of the issues with accessibility brought on by the short length of the region's drilling season.

With the renewed focus from the oil and gas industry, Arctic waters have become hot political ground, not least between North America and Russia.

Earlier this year, Rosneft and ExxonMobil signed a strategic cooperation agreement for the development of resources in the Kara Sea in the Arctic, making Russia another key player in the so-called Cold Rush. As much as $3.2 billion (£2.3 billion) is to be spent on developing Blocks 1, 2 and 3 in the Kara Sea, among others, and with Exxon's investment record many expect the return to be significant.

It's not just oil which is sparking this renewed interest in the Arctic – minerals are a key target too – and it's also not just the debating table which is being used to defend this. Country's surrounding the Arctic sea have been stepping up their military presence in the region as they look to claim greater amounts for their own.

Russia already ruffled feathers when it placed a flag on the Arctic seabed in 2007, with Canada among those which took particular offence to the gesture, gearing nations on both sides of the Atlantic up for a new 'cold war'.

Rob Huebert, a professor of political science at the University of Calgary, warned in a recent paper: "The strategic value of the region is growing. As this value grows, each state will attach a greater value to their own national interests in the region. The Arctic states may be talking co-operation, but they are preparing for conflict."

Despite the political overtones, the facts about the Arctic remain the same. And although companies are preparing for delays, enthusiasm does not appear to be dampening.

A Statoil executive recently announced it is to begin Arctic drilling in Alaska in 2014, acknowledging: "The reason we're looking at 2014 as the earliest possible has to do with the long period of work that needs to be performed for permits and to meet regulatory requirements."

This serves to suggest that while there are operational, political and environmental challenges to operating in what is perhaps the oil industry's final frontier, they are by no means insurmountable.