Oil industry efforts to develop the American Arctic took another hit today as ConocoPhillips scrapped plans to drill in the Chukchi Sea in 2014.
Blaming regulatory uncertainty, ConocoPhillips issued a statement that the firm "has determined it would not be prudent at this time to make the significant monetary commitments needed to preserve the option to drill in 2014."
ConocoPhillips officials specifically took aim at the Interior Department's recent assessment of Royal Dutch Shell PLC's 2012 oil exploration program.
The report set tough new requirements on Shell's future efforts to drill in the region and recommended development of an Arctic-specific model for offshore oil and gas exploration (EnergyWire, March 15).
Trond-Erik Johansen, president of ConocoPhillips Alaska, said the company will work with the federal government and other leaseholders to develop Arctic standards for oil and gas development.
"Once those requirements are understood, we will re-evaluate our Chukchi Sea drilling plans," he said. "We believe this is a reasonable and responsible approach given the huge investments required to operate offshore in the Arctic."
Environmentalists who have pushed for tougher Arctic oil drilling standards supported ConocoPhillips' delay.
"This recognition by ConocoPhillips of the complicated, expensive and highly risky nature of Arctic Ocean drilling is great news," said Lois Epstein, Arctic program director for the Wilderness Society.