Tax Increase Hampers Statoil ASA(ADR) (STO)

Some companies, though, are still hopeful. Exxon Mobil Corporation (NYSE:XOM), through a joint venture with Russia’s OAO Rosneft, added seven more licenses earlier this year to develop acreage in Russia’s Arctic Shelf, while China National Offshore Oil, or CNOOC, recently announced that it’s partnering with Iceland’s Eykon Energy to apply for a license to explore and produce oil and gas in the Arctic waters off the coast of Iceland.

Final thoughts
Though the Arctic region could potentially hold vast oil and gas reserves, drilling in the area is accompanied by severe risks. In addition to high costs and lack of infrastructure, the threat of an environmental backlash, and the ramifications of an oil spill or other accident loom large. These are issues investors should be wary of when they invest in companies that are spending heavily to explore Arctic frontiers.

The article Tax Increase Hampers Statoil originally appeared on Fool.com.

Fool contributor Arjun Sreekumar has no position in any stocks mentioned. The Motley Fool recommends Statoil ASA(ADR) (NYSE:STO).

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