ConocoPhillips delays its 2014 Chukchi Sea exploration plan

There’s a new setback for the planned oil and gas exploration offshore Arctic Alaska. ConocoPhillips will put its planned 2014 exploration drilling in the Chukchi Sea on hold, the company announced Wednesday in a press release.

Company officials cited uncertainties over federal regulations.

The announcement follows Shell's recent decision to delay its planned exploration in the Chukchi and Beaufort Seas planned for 2013 into 2014.

“While we are confident in our own expertise and ability to safely conduct offshore Arctic operations, we believe that more time is needed to ensure that all regulatory stakeholders are aligned,” Trond-Erik Johansen, ConocoPhillips’ Alaska president, said in a statement.

The company cited a recent Department of the Interior report calling on industry and government to work together to develop an Arctic-specific model for offshore oil and gas exploration in Alaska.

The model would focus on standards in the areas of drilling, maritime safety and emergency response equipment and systems.

“We welcome the opportunity to work with the federal government and other leaseholders to further define and clarify the requirements for drilling offshore Alaska,” Johansen said. “Once those requirements are understood, we will re-evaluate our Chukchi Sea drilling plans. We believe this is a reasonable and responsible approach given the huge investments required to operate offshore in the Arctic.”

In 2008, ConocoPhillips was awarded 98 exploration lease tracts in the Chukchi Sea Outer Continental Shelf.

The company has more than 50 years of Arctic experience drilling both onshore and offshore Alaska, the statement said. ConocoPhillips is Alaska’s largest oil producer, operating the Kuparuk and Alpine fields and maintaining a working interest in the Prudhoe Bay unit and the Trans Alaska Pipeline System.

In a statement, Sen. Lisa Murkowski said, “I’m disappointed that ConocoPhillips won’t be moving forward with its Arctic program next year — Alaska and the nation need the energy and the jobs that new oil production off Alaska’s coast would bring — but it’s a decision that’s not unexpected.

“Companies can’t be expected to invest billions of dollars without some assurance that federal regulators are not going to change the rules on them almost continuously. The administration has created an unacceptable level of uncertainty when it comes to the rules for offshore exploration that must be fixed if we’re going to end our dependence on oil from the Middle East.” 

04/10/2013 - 7:29am