Chevron cancels Arctic drilling plans

Chevron Corp. is suspending indefinitely its plans to drill for oil in the Beaufort Sea in Canada’s Arctic.

Chevron told Canadian regulators of the cancellation Wednesday in a letter citing “economic uncertainty in the industry” amid falling oil prices, Reuters reported. Chevron confirmed the report.

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The company had planned to drill in a block about 155 miles northwest of Tuktoyaktuk in Canada’s Northwest Territories. It had initially made the plans in 2009 to start drilling in the 2020s.

Reuters said the drilling project is the largest put on hold due to the oil price plunges in the last six months, despite the fact that many major oil companies are slashing budgets next year and citing the low prices.

Chevron paid C$103.3 million for exploration rights in an area of 508,000 acres, Reuters said.

Imperial oil, a Canadian joint venture between the United States’s Exxon Mobil Corp. and the United Kingdom’s BP, confirmed to Reuters Wednesday that it had not changed its plans for Beaufort Sea drilling, though it has not yet made a final decision on whether to drill in its leased areas.