Statoil to exit Arctic leases north of Alaska

HOUSTON — Statoil says it is pulling out of Arctic leases north of Alaska two months after Shell drilled a dry hole in a nearby region, the latest setback in the petroleum industry’s efforts to tame U.S. Arctic waters.

The Norwegian oil company has held leases and studied drilling conditions in the oil-rich Chukchi Sea north of Alaska for seven years, though it never drilled any wells there. The failure of Royal Dutch Shell’s $7 billion drilling expedition was discouraging, and it meant the Anglo-Dutch oil major would never build underwater pipes and other infrastructure that Statoil could have used to help transport its crude from below the frigid waters to land.

Statoil, which is controlled by the Norwegian government, said it has explored its options in the costly Chukchi Sea since 2008, but the region couldn’t compete for funding with Statoil’s other assets amid an oil-market depression. “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 written statement on Tuesday.

Statoil said it is exiting 16 leases it operates and 50 stakes it has in leases operated by ConocoPhillips in the Chukchi Sea. The seven-year-old leases would have expired in 2020. It also said it is planning to close its office in Anchorage.

Still, the multinational oil company is one of the world’s most active Arctic explorers. It is evaluating a dozen Arctic wells it drilled in the Barents Sea off the coast of Norway over the past few years and it has licenses to operate in the Arctic waters near Greenland and Russia.

Statoil’s Alaska announcement comes two months after 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 Chukchi Sea is believed to hold more than 15 billion barrels of crude and 76 trillion cubic feet of gas. Shell had spent $2.1 billion to purchase 275 leases north of Alaska the same year Statoil entered the region.Statoil had spend about $80 million acquiring its leases in 2008.