Norway’s Statoil announced Tuesday it is ending its seven-year operation in the Arctic Ocean off Alaska’s northern coast without drilling a single well.
The company announced the 16 leases it holds in the Chukchi Sea are “no longer competitive” within the company’s portfolio. The company will return its leases to the U.S. government and close its office in Anchorage.
“Since 2008 we have worked to progress our options in Alaska. Solid work has been carried out, but given the current outlook we could not support continued efforts to mature these opportunities,” said Tim Dodson, executive vice president for exploration in Statoil.
The company also ended its stake in 50 leases operated by ConocoPhillips, also in the Chukchi Sea. Those leases expire in 2020.
In September, Shell announced it was ending its Arctic Ocean oil operations after its well, about 150 miles from Barrow, Alaska, didn’t turn up enough oil to make it economically viable.
Sen. Lisa Murkowski, R-Alaska, blamed the regulatory environment set up by President Obama’s administration for Statoil’s decision to leave the area.
“I am very concerned that, for the second time in as many months, a major company has decided to walk away from Alaska because of the uncertainty surrounding our federal government’s support for Arctic development,” she said. “Low oil prices may have contributed to Statoil’s decision, but the real project killer was this administration’s refusal to grant lease extensions; its imposition of a complicated, drawn-out and ever-changing regulatory process; and its cancellation of future lease sales that have stifled energy production in Alaska.
“These actions threaten to undermine Alaska’s economy, our security and our environment,” she added.
Murkowski’s office cited federal estimates that there are 24 billion barrels of oil and 104 trillion cubic feet of natural gas below the Chukchi Sea. The leases held by Statoil were roughly 40 miles away from the area Shell announced it would stop drilling in September.
“It is absurd that Interior has created a regulatory environment where operators cannot have commercially viable exploration programs, because so many requirements and hurdles have been put in place,” Murkowski said.
