Sen. Murkowski laments Statoil’s Alaska exit. Blames ‘project killing’ administration

Murkowski laments Statoil's Alaska exit. Blames 'project killing' administration

U.S. Senator Lisa Murkowski has slammed the Obama administration’s offshore energy development strategy, on the back of Statoil’s decision to exit its Alaskan operations.

This is the second time in two months a major oil company has decided to exit Alaska, with Shell being the first in September.

In response to the announcement by Norway’s Statoil on Tuesday that it is giving back the leases in Alaska’s Arctic offshore frontier that the company had won in 2008, Murkowski said: “I am very concerned that, for the second time in as many months, a major company has decided to walk away from Alaska because of the uncertainty surrounding our federal government’s support for Arctic development.”

While the senator acknowledged the fact that low commodity prices have contributed to Statoil’s move, something Shell has cited as well, she said that the main reason was the difficult regulatory environment in the U.S.

Murkowski said: “Low oil prices may have contributed to Statoil’s decision, 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. These actions threaten to undermine Alaska’s economy, our security, and our environment.”

The Norwegian oil company announced its decision on Tuesday, saying the leases in the Chukchi Sea were no longer considered competitive within Statoil’s global portfolio. Statoil will exit the leases and close the office in Anchorage, Alaska.

 

“…the real project killer was this administration’s refusal to grant lease extensions” – Senator Murkowski

 

Tim Dodson, executive vice president for exploration in Statoil, said: “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.” Read more on Statoil’s Alaska exit here: https://bit.ly/1j5hrfG

Worth noting, Statoil will be returning its 16 leases in Alaska, without having drilled a single exploratory well in the region.

The northern waters offshore Alaska’s Arctic coastline holds an estimated 24 billion barrels of oil and 104 trillion cubic feet of natural gas, according to federal assessments. Statoil’s Chukchi leases are located roughly 40 miles north of Shell’s Burger prospect. Shell abandoned the Alaska operations in September, citing low oil prices, disappointing Burger drilling results, and regulatory uncertainty in the U.S.

“It is absurd that Interior has created a regulatory environment where operators cannot have commercially viable exploration programs, because so many requirements and hurdles have been put in place,” Murkowski has previously said.

Offshore Energy Today staff

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