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Obama Cancels Arctic Oil Drilling Lease Sales

The Obama administration has cancelled 2016 and 2017 Arctic oil drilling lease sales.

The US Department of the Interior on Friday said it will cancel two oil companies’ potential Arctic offshore lease sales scheduled under the current five-year offshore oil and gas leasing program for 2012-2017. It also denied Shell and Statoil’s requests to extend the time on leases that they currently hold.

The decision follows Shell’s announcement last month to abandon its Arctic drilling operations and cease further exploration activity in offshore Alaska for the foreseeable future.

“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 in a statement.

The American Petroleum Institute condemned the move. “Investment decisions have been directly thwarted by the policy decisions of the administration related to Alaskan Outer Continental Shelf development, and lease extensions are clearly justified under the circumstances,” said API director of upstream Erik Milito. “And while it is not surprising that Interior canceled the remaining lease sales because there was an absence of nominations, it is the significant regulatory uncertainty that has created the reluctance on the part of our industry. Still, America’s oil and natural gas industry remains firmly committed to the long-term development of offshore Alaska resources.”

 

 

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