Within weeks a giant oil platform made in South Korea will begin its journey round the tip of Africa to a Norwegian fiord deep in the Arctic Circle.

The platform will then be towed 60km off the northern coast of Norway to play its role in the first oil production from the Norwegian Arctic. The Goliat field, operated by Italy’s Eni, will be the northernmost offshore oil production site in the world.

At about the same time, a drilling rig will leave Singapore for the remote Chukchi Sea, northwest of Alaska. One of two contracted by Royal Dutch Shell, the pair will wait for winter sea ice to clear before starting a summer drilling campaign in the US Arctic.

In spite of objections from environmental campaigners, the Arctic has long been heralded as the next big frontier for “Big Oil”. A US geological study in 2008 estimated it held about 13 per cent of the world’s undiscovered oil — some 412bn barrels of oil equivalent — and 30 per cent of its undiscovered gas.

Now, after a more than 50 per cent collapse in oil prices since last summer to less than $60 a barrel, there will be fewer drilling rigs heading north to the Arctic. The region is a high cost frontier because it is so remote, and for many energy groups halting exploration in the Arctic is likely to be preferable to abandoning cheaper projects elsewhere that offer swifter returns.

“We will see something of a pullback in high-cost frontiers, and the most prominent of those is the Arctic,” says Andrew Latham of energy consultants Wood Mackenzie. “I wouldn’t expect anyone else to be pushing ahead with Canada, Greenland or other parts of the Arctic until we get a recovery in the price environment.”

Indeed, Statoil, Norway’s biggest energy group, on Wednesday indicated it was unlikely to drill in the Norwegian Arctic this year. Eldar Saetre, chief executive, said it could delay development of the huge Johan Castberg field.

Chevron of the US has shelved indefinitely plans to drill in the Beaufort Sea in the Canadian Arctic, while Statoil, Denmark’s Dong Energy and France’s GDF Suez have all handed back licences in Greenland.

Meanwhile, ExxonMobil of the US was forced last year to pull out of its exploration joint venture with Russia’s Rosneft in the Kara Sea in the Russian Arctic, because of western sanctions against Moscow.

“If sanctions were lifted tomorrow, Rosneft and Exxon would proceed. They’ve already spent a lot of money, drilled a hole and enjoyed success. But I don’t think anyone else, if sanctions were lifted, is going to want to chase after barrels in what is now a very different environment,” says an industry analyst of the remote Russian Arctic.

Wood Mackenzie says offshore Arctic exploration only really happens when oil prices are high. And, even at $100-plus prices there have been few substantial recent finds.

No offshore wells have been drilled in the Canadian Arctic since 2006, and exploration off the west of Greenland by Cairn of the UK disappointed. Even results in the Barents Sea, the most promising area of the Arctic, have been mixed: there were nine discoveries from 14 exploration wells in 2014.

Meanwhile, environmental opposition to exploiting reserves is growing. US President Barack Obama last month announced plans for additional protections against drilling in a section of the country’s Arctic national wildlife refuge in northern Alaska that is believed to hold roughly 10.4bn barrels of oil.

The move will not have any immediate impact — drilling is not allowed in the area — and the president’s plans are likely to be rejected by a Republican-dominated Congress. But the proposal is a sign of how contentious the idea of Arctic drilling remains in the US, and one reason the industry is turning away from it. Shell expects protests against its Chukchi campaign.

This combination of political sensitivities and unfavourable economics in the Arctic has encouraged US oil groups to focus on more attractive opportunities, including the country’s abundant shale reserves and offshore prospects in the Gulf of Mexico.

Energy groups have abandoned the Arctic before — many wells were drilled in the Barents Sea in the 1980s before companies left.

But for those groups that have sunk money into the Arctic, the “spot” price of crude counts for less. These projects will typically take a decade or more from discovery to first oil, involving planning horizons far beyond those in many other industries. If, like Shell, you have already spent several billion dollars getting this far, pulling out now feels short-sighted. Similarly, Eni cannot afford to turn back.

Likewise those who have enjoyed exploration success such as Lundin Petroleum. The Swedish group is bullish, saying it will continue drilling in the Barents Sea — part of the Norwegian Arctic. Interest in Norway’s next licensing round this year is expected to be high as companies bid for the first new acreage offered in more than 20 years, a series of blocks in the Barents right up to the newly set maritime border with Russia.

Ashley Heppenstall, Lundin’s chief executive, says Arctic oil is not a short-term play. “At the end of the day, you are looking at 20 to 30 year developments . . . A billion barrels of oil have been found [in the Barents] in recent years. It gives confidence that there will be an oil play,” he adds.

Russian oil and gas groups under pressure

No companies face as big a question mark over Arctic exploration as Russia’s oil and gas groups, writes Kathrin Hille in Moscow.

Just as Moscow was gearing up to start exploiting the potentially vast resources off Russia’s long northern coast, it was hit with western sanctions last year that bar US and European companies from supplying the necessary technology and money.

The measures — aimed at stopping Russia from fuelling a military conflict that threatens to break apart neighbouring Ukraine — have cut state-controlled companies Rosneft and Gazprom and privately owned Lukoil off from the rigs, ships and financing needed to go ahead.

When ExxonMobil pulled out of drilling with Rosneft in the Kara Sea last year because of these sanctions, the US group took with it West Alpha, a rig commissioned from Norwegian company SeaDrill. A proposed deal for Rosneft to take a 30 per cent stake in SeaDrill subsidiary NADL has stalled over the sanctions as well.

“In this situation and with oil prices as low as they are, the already long-term projects are certain to be pushed back further,” says Maxim Nechaev, head of consulting at IHS in Russia. “Not a single well has been drilled east of the Kara Sea, and that’s even less likely to happen now.”

Igor Sechin, Rosneft chief executive, on Wednesday tacitly acknowledged that the group would not drill in the Arctic this year. Laying out investment and exploration projects for 2015 to Russian president Vladimir Putin, he did not mention the Arctic once. Rosneft hopes it can resume drilling in the summer of 2016 if sanctions are eased by then, as it has an option to continue using NADL rigs.

Rainer Seele, chairman of German oil and gas company Wintershall, which has a long-running partnership with Gazprom, said Russia should focus on exploration of other large undeveloped resources in Siberia.