Statoil, a Norwegian oil firm, on Tuesday said it is ending its operations in the Arctic Ocean, months after Royal Dutch Shell did the same.
Statoil said it will exit its 16 leases in the Chukchi Sea and its stake in 50 leases operated by ConocoPhillips, which were originally set to expire in 2020.
The company said the circumstances facing potential Arctic drilling operations do not support “continued efforts” there.
“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,” Tim Dodson, Statoil’s executive vice president for exploration, said in a statement.
“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.”
Statoil’s move comes after Shell pulled out of the Arctic in September following a lengthy oil exploration mission there. The company cited economic and regulatory hurdles to future drilling in its decision.
The Arctic region is thought to hold one of the largest untapped oil reserves in the world.
But companies have been hesitant to drill in the region because of low oil prices and the lack of large easy-to-tap oil stores there.
Following Statoil’s decision, Republicans blamed the Obama administration for discouraging more energy production in the Arctic.
“Low oil prices may have contributed to Statoil’s decision,” Sen. Lisa MurkowskiLisa Ann MurkowskiTrump-endorsed candidate leading GOP field to replace Crist in Florida: poll House passes bill to expand workplace protections for nursing mothers Democrats look for plan B on filibuster MORE (R-Alaska), the chair of the Energy and Natural Resources Committee, said in a statement. “But the real project killer was this administration’s refusal to grant lease extensions; its imposition of a complicated, drawn-out, and ever-changing regulatory process; and its cancellation of future lease sales that have stifled energy production in Alaska.”
A spokeswoman for Rep. Rob Bishop (R-Utah), the chair of the House Natural Resources Committee, added: "Statoil follows Shell to flee the Arctic thanks to Obama's regulatory onslaught in the region, which has made a tough economic outlook impossible for companies to overcome.”