Another major oil company has announced it will exit Alaska’s Arctic waters.
Norwegian oil company Statoil said Tuesday (Nov. 17) that it will end exploration efforts in the Chukchi Sea and close its Anchorage office. The decision comes just two months after Shell ended its quest to drill in the Arctic Ocean, citing disappointing results at its first well.
Statoil Spokesman Peter Symons said the Chukchi just didn’t stack up against the company’s other options worldwide: “Based on a number of different criteria, the leases in the Chukchi were considered not competitive within the global context.”
That’s in part because of the Arctic’s difficult environment and high cost at a time of plunging oil prices, Symons said. But Shell’s exit also influenced the decision. Shell would have been an anchor tenant for the region, building out infrastructure that other companies could piggyback on.
“That certainly would have enhanced the commerciality of our leases,” Symons said. “So it certainly played a role.”
Statoil owned 16 leases in the Chukchi Sea, and shared ownership with ConocoPhillips on 50 others. It bought the leases for about $75 million in 2008 — the same year Shell bought its leases. Shell was the only company to actually drill in the region, but Symons said Statoil conducted seismic and other studies.
The leases expire in 2020, and earlier this fall, the Obama administration declined both Shell and Statoil’s requests to extend them, saying the companies had presented no concrete plans for exploration.
Senators Lisa Murkowski and Dan Sullivan both issued statements blaming federal regulators for Statoil’s decision. But Symons said that wasn’t the main issue.
“The regulatory framework certainly has influenced [Statoil], but it’s not a primary driver,” he said. “This is a commercial decision first and foremost.”
Symons said the company has only two employees in its Anchorage office. Besides the Chukchi leases, the company has no other holdings in Alaska.
Statoil still has active leases in Arctic waters off Russia and Greenland, and is producing oil from an offshore site in Norway’s Barents Sea.