About a quarter of the world’s undiscovered oil reserves – estimated to be 375 billion barrels or enough to fuel the world for 12 years – are believed to lie under the Arctic Ocean, according to Norway’s state oil company, Statoil.

But the rush to harness these resources has erupted in arguments, including border disputes, between countries with legal claim to the area.

Eight countries - the US, Russia, Canada, Denmark, Norway, Sweden, Finland and Iceland - have claims to the Arctic, while energy-hungry China has also started showing interest.

These tensions escalated late last week as Canada’s prime minister, Stephen Harper, issued a stern “hands-off” to the US over territorial claims to the Arctic sea lanes.

The Canadian government has now committed three armed navy icebreakers to the Northwest Passage, building a US$1.7 billion (A$2.27 billlion) deep-water port in the area, and is planning a network of underwater "listening posts" to monitor sea traffic.

Temperatures in the Arctic are expected to rise 5.5 degrees Celsius in the next 100 years, according to findings from the US Arctic Research Commission.

The organisation’s chairman George Newton also told delegates at the conference of business leaders in Davos, Switzerland, that last year the Arctic ice sheet was the smallest it had ever been.

With global warming steadily melting the passage, the period during which it is navigable is increasing each year. In addition to oil and gas reserves, this phenomenon also offers access to untapped fishstocks and a shipping route that shortens the journey between Europe and Asia by about 4025 kilometres.

Much of the oil and gas in question is believed to exist below the Barents Sea, north of Norway and Russia. Here, Statoil has set up the Snovit project, which operates below the sea and sends export gas to the US.

But development of this region is also complicated by 35 years of ongoing border disputes between Norway and Russia.

The Arctic is considered highly attractive because it is closer to Europe and the US than the Middle East, which would reduce transport costs and provide more stability and supply security.

Meanwhile, the Nordic Council Environment and Natural Resources Committee will examine introducing new environmental standards for oil and gas activity in the Arctic Sea.

The proposal is based on the special natural conditions in the Arctic, the vulnerability of the environment and the establishment of petroleum plants in the Arctic, the Barents Sea and the Kara Sea.