Norwegian oil major Statoil says it has decided to exit its operations in Alaska as it tightens up its exploration portfolio.
The decision means that Statoil will exit its 16 operated leases, and its stake in 50 leases operated by ConocoPhillips, all in the Chukchi Sea. The leases were awarded in the 2008 lease sale in Alaska and are set to expire in 2020.
Statoil will also close its office in Anchorage, Alaska, the company said.
The company says the decision comes amid an effort to optimize its portfolio and strengthen its financial performance and positioning for long-term value.
“Since 2008 we have worked to progress our options in Alaska. Solid work has been carried out, but given the current outlook we could not support continued efforts to mature these opportunities,” says Tim Dodson, executive vice president for exploration in Statoil.
Statoil’s exit comes following Shell’s failed bid to find recoverable oil and gas in the Chukchi and Beaufort Seas after spending $7 billion on exploration there.
More recently, the U.S. Interior Department decided to cancel the two remaining Arctic oil and gas lease sales under the current five-year leasing program ending in 2017 due to current market conditions and low industry interest, effectively halting drilling offshore Alaska under the Obama administration.
Last month, the Department of Interior’s Bureau of Safety and Environmental Enforcement (BSEE) also denied requests from Shell and Statoil for lease suspensions, which would have extended the expiration date of the leases beyond their primary terms of ten years. The BSEE said that, among other things, “the companies did not demonstrate a reasonable schedule of work for exploration and development under the leases”.
Dodson added: “Our understanding of the challenges and opportunities has increased considerably over the last years. This gives Statoil a unique position and experience which the company will continue to apply going forward.”