Chevron Corp. has canceled its plans to drill for oil in the Beaufort Sea because of plummeting oil prices, according to reports.
It is the fourth oil conglomerate to suspend offshore drilling in the Arctic over the past couple of years, though this year’s reason is different. In February 2013 Royal Dutch Shell announced a halt to drilling in the Chukchi Sea after a string of equipment failures, while Norwegian’s Statoil announced a postponement in its own drilling plans. ConocoPhillips announced last April that it would not drill exploratory wells off of Alaska’s Arctic coast in 2014.
Chevron had been planning to drill in the Beaufort Sea off of Canada in 2020 once it got approvals, The Globe and Mail reported, but a recent drop in oil prices caused the company to file with the country’s National Energy Board on December 17 to withdraw its application.
Still pursuing deep-sea drilling dreams is Imperial Oil Ltd., in partnership with Exxon Mobil Corp. and BP PLC, The Globe and Mail said.
“We’re in the early stages of assessing potential and no business decisions have been made to this point,” Imperial spokesman Pius Rolheiser told The Globe and Mail. “But we are continuing to pursue regulatory and other work related to that initiative. Given the current outlook for the regulatory process and other work that needs to take place, the earliest we’d be in a position to begin drilling a well would be the summer of 2020.”
Chevron’s drilling would have occurred in what is known as the EL 481 block, 155 miles northwest of Tuktoyaktuk, Northwest Territories. The overall region that Chevron has leased is 800 square miles, not too far north of two major environmental preserves, one in Canada and one in Alaska, Vice News noted—Ivvavik National Park in Canada and the Arctic National Wildlife Refuge just over the Alaskan border.
This is the largest drilling project to be scuttled due to falling oil prices, according to Reuters. Similar changes are occurring throughout the oil industry, with implications for projects such as the Keystone XL pipeline, as experts have begun to question the cost-effectiveness of that endeavor.