Norway's Statoil has decided to quit its Alaskan exploration efforts in the Chukchi Sea, following a recent move by Shell to drop its search for oil in the US Arctic after a key drilling target came back dry.
Citing recent exploration results in neighboring leases, Statoil said its leases in the Chukchi Sea are no longer considered competitive within its global upstream portfolio. The company said it will also shut its office in Anchorage, Alaska.
The move will see Statoil exit 16 operated leases, and its stake in 50 leases operated by ConocoPhillips, all in the Chukchi Sea. The leases were awarded in a 2008 lease sale in Alaska and expire in 2020.
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, Tim Dodson, Statoil executive vice president for exploration, said in a statement.
Shell in September announced plans to drop its Arctic exploration after a well testing its Burger J prospect in the Chukchi Sea was a disappointment. The company will, however, retain ownership of its leases.
It had been chasing Arctic oil for years, having spent some $7 billion, or 20% of its global exploration budget, on Arctic exploration since winning licenses there in 2005. Legal and environmental challenges as well as logistical roadblocks caused the costs of the long-delayed exploration drive to escalate.
In the wake of Shell's move, market watchers had predicted Statoil and ConocoPhillips could be next to exit the region as the costs and risks of exploring in the Arctic are seen to outweigh the expected offshore resources.
Houston-based Statoil spokesman Peter Symons said the company is in discussions with ConocoPhillips on the disposal of its stake in the 50 jointly-owned leases, in which Statoil holds varying percentages.