Supermajors drop Arctic leases

Tuesday, May 10, 2016

Several supermajor oil and gas companies including Anglo-Dutch supermajor Shell, Italian giant Eni, and US supermajor ConocoPhillips have surrendered more than 2 million acres in the Chukchi Sea.

The Polar Pioneer, from Transocean. 

According to Oceana, an environmental group aimed at protecting the world’s oceans, disclosed governmental documents revealed that ConocoPhillips, Eni, and Iona Energy have relinquished all of their leases in the Chukchi Sea.

The documents also disclose that Shell has relinquished more than 150 of its leases in the area, with the exception of the Burger prospect, where the company failed to prove oil in September 2015 after several fierce battles to explore in the region.

Shell spokesperson Natalie Mazey told OE: "We have relinquished 274 of our 275 federal leases in the Chukchi Sea this year. This includes 238 leases we relinquished in May and 36 leases we relinquished in April. In the summer months of 2016, we will remove the remaining equipment from the drilling sites in Alaska. We continue to believe offshore Alaska and the broader Arctic have strong exploration potential and are areas that could ultimately be important sources of energy to the State of Alaska, the United States and the world."

In total, all four companies will be abandoning more than 350 leases that encompass more than 2 million acres.

In November, Norwegian giant Statoil pulled the plug on its efforts in the Chukchi Sea, leaving behind 16 operated leases, in addition to stake in 50 leases that are operated by Houston-based ConocoPhillips. All leases and were awarded in the 2008 lease sale in Alaska, with expiration dates in 2020. 

In addition, EnCana and Armstrong have also left Arctic waters. However, Spain's Repsol is still holding on to 93 leases, and Shell is retaining it leases in the Beaufort Sea.

In October, the US Department of the Interior announced the cancelation of two planned Arctic offshore lease sales under the US government’s current five-year plan for 2012-2017, mainly due to Shell’s failed Arctic campaign and current market conditions.

In 2008, more than 480 leases covering more than 2.7 million acres were sold in the Chukchi Sea. After the relinquishments made public this week, fewer than 100 of those leases will remain, covering approximately 20% of the previously leased acreage, Oceana said. 

Read more:

Shell ends Polar Pioneer contract

Statoil pulls plug on Alaska

Interior cancels Arctic lease sales

Shell abandons Alaska exploration

Categories: Arctic

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