Statoil follows Shell out of Alaska
This week, the Norwegian oil company Statoil announced that it is abandoning all plans to drill in the Alaskan Arctic. The announcement follows a similar announcement from Shell, who said they would end Alaskan off-shore drilling operations in September. Shell said it was abandoning efforts after exploratory drilling didn’t find enough oil to merit continuing.
Statoil is exiting 16 of its own leases and its share of other 50 leases being operated by Conoco Phillips. “The leases in the Chukchi Sea are no longer considered competitive within Statoil’s global portfolio, so the decision has been made to exit the leases and close the office in Anchorage, Alaska,” the Statoil said in a press release.
Low oil prices in part are driving oil companies out of the region. Last month, the State Department cancelled two oil lease sales, citing a lack of interest. Environmental concerns and the negative press associated with new fossil fuel projects may also be contributing factors to the slowdown in the area, as are heavier governmental regulations.
But interest in new drilling projects in Alaska hasn’t come to a full stop by any means. This week, Conoco Phillips approved funding for a $900 million drilling project in the National Petroleum Reserve—the first oil production project on the reserve. Alaska Dispatch News reports the project will benefit from the state’s tax incentives for “new oil” and building production is expected to start by 2018.
For those fighting to protect Alaska’s landscape and wildlife, the news from Shell and Statoil should be welcomed. But the fight to "keep it in the ground" still has many more battles ahead.