Arctic offshore lease sales canceled

The U.S. Department of the Interior has canceled a pair of upcoming Arctic offshore lease sales citing current market conditions and low interest.

The first of the two sales, Chukchi Sea Lease Sale 237, was tentatively scheduled for 2016. The Bureau of Ocean Energy Management (BOEM)said a call for information and nominations in September 2013 went unanswered. Earlier this month, Royal Dutch Shell called off their Arctic exploration plans “for the foreseeable future” after disappointing results at the Burger J prospect in the Chukchi Sea.

A second sale, Beaufort Sea Lease Sale 242, was tentatively scheduled for the first half of 2017. BOEM said only one nomination was received when the agency issued a request last July.

The Bureau of Safety and Environmental Enforcement (BSEE) has also denied lease suspension requests from Shell and Statoil which would have allowed the companies to retain existing leases beyond their primary 10-year terms. Shell has leases in both the Chukchi and Beaufort Seas, and Statoil has leases in the Chukchi. The Beaufort leases are due to expire in 2017 and the Chukchi leases in 2020. In denying the requests, BSEE noted that in both cases the companies had not demonstrated the required “reasonable schedule of work for exploration and development under the leases.”

“In light of Shell’s announcement, the amount of acreage already under lease and current market conditions, it does not make sense to prepare for lease sales in the Arctic in the next year and a half,” said Secretary of the Interior Sally Jewell. “I am proud of the performance of Interior’s Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement, the U.S. Coast Guard and others in ensuring that Shell’s program this past season was conducted in accordance with the highest safety and environmental standards.”

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Ashley Herriman

Ashley Herriman is WorkBoat's online editor.

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