11/5/75

TOKYO, May 13 (AP-DJ) - Vast amounts of gas and oil are hidden under the permafrost in the North American Arctic and will begin flowing to markets only after huge amounts of money are spent on delivery systems, a Canadian oil executive said today.

Donald Mclvor of Imperial Oil Ltd, said in an interview that experts belive there are at least 40 billion barrels of oil and 400, 000 billion cubic feet of gas in Alaska’ s North Slope, the nearby Beaufort basin in Canada and the Svedrup basin farther to the northeast.

That is about twice the proven reserves of oil and gas in the 48 contignous U.S. states. At least 30 to 40 per cent of the Aretie petroleum is recoverable with present technology, he added, and additional reserves probably will be found.

Cost Is High

Mr. McIvor, attending the world petroleum conference under way here, said that Canadian gas is expected to be sent to market by pipeline beginning about 1980 and Canadian oil a few years later. The first U.S. oil is expected to flow over the Alaska pipeline in 1977.

The cost of the Arctic oil amounts to about a $15,000 investment for each expected barrel of daily ouput. The equivalent figure in the Mideast is about $500, he said.

The Arctic petroleum requires an investment roughly equal to the investment needed to extract oil from tar sand. But Mr. McIvor said private oil companies were willing to make the Arctic investment without any guaranteed floor price to protect their investment in case prices fell.

Opposes Guarantees

He said if oil compagnies demanded a floor price before making such a risky investment the government would also want a ceiling price in some other situation which also would be unfair.

"Even though it is expensive, it is in our best interest to have (energy) self-sufficiency, not only from the balance-of-payments standpoint, but also from security. And isn’ t it better to spend the money in Canada and get the ’ripple effect’ on the ecoromy ?" he asked.

Canada and the Soviet Union are the only two industrial countries with energy self-sufficieney, but next year Canada’ s consumption of oil and gas is expected to outstrip production for the first time.