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The Polar Pioneer cancellation marks the second for Transocean this month.
Hilcorp’s plan for a 23-acre gravel island, about the size of 17.4 football fields, has drawn mixed reviews from conservationists and outright condemnation from environmentalists who believe the oil should stay in the ground.
Statoil’s announcement comes two months after Royal Dutch Shell announced it would abandon its $7 billion Arctic drilling efforts in a neighboring part of the Chukchi Sea north of Alaska, after drilling a dry hole.
The company says it’s walking away from oil exploration in U.S. Arctic waters for the “foreseeable future,” but it’s keeping its options open.
Shell’s decision last month to halt offshore drilling in the Chukchi and Beaufort seas raised questions about the need for the port project aimed primarily at reducing travel costs for oil and gas support vessels.
The Interior Department announced it was canceling government auctions of drilling rights in the Chukchi and Beaufort seas, previously scheduled for 2016 and 2017 respectively. At the same time, it formally rejected bids by Statoil and Shell for more time to search for crude under their existing Arctic leases.
Shell’s aggressive bidding for drilling rights in the Chukchi Sea in 2008 put the company on a trajectory that ended with its $7 billion bust in the Arctic Ocean.
Shell is far from alone in making a big bet on an offshore play only to end up with disappointing results. From the Gulf of Mexico to the shores of Angola, offshore exploration has yielded plenty of dry holes.
After failing to find commercially viable quantities of oil and gas at its Chukchi Sea well, Shell said it will halt exploring U.S. Arctic waters and could take a $4.1 billion write down.
Environmentalists say there is a clash between Shell’s exploratory oil drilling in the Chukchi Sea and Obama’s visit to survey shrinking glaciers and speak with coastal residents worried about rising seas.