US producer ConocoPhillips has decided to scrap its 2014 drilling plans off Alaska due to "uncertainties" in federal regulations for Arctic exploration.
The company said it could not justify the significant financial investment required to drill in the Chukchi Sea next year amid "evolving federal regulatory requirements and operational permitting standards".
“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 stake holders are aligned,” said Trond-Erik Johansen, president of ConocoPhillips Alaska.
Earlier this month, the US Interior Department called on industry and government to co-operatively develop an Arctic-specific model for offshore exploration in Alaska focused on streamlining drilling standards and preparing emergency-response requirements.
“Once those requirements are understood, we will re-evaluate our Chukchi Sea drilling plans," Johansen said. "We believe this is a reasonable and responsible approach given the huge investments required to operate offshore in the Arctic."
ConocoPhillips' decision follows Shell's choice to push back its own drilling plans this year after a series of mishaps culminated with the grounding of one of the Anglo-Dutch supermajor's Arctic drilling rigs.
Shell was forced to "pause" its plans to drill off Alaska later this year after it became apparent that the barge Kulluk and the drillship Noble Discoverer would require major repairs and would not be ready for the summer dilling campaign.
Norwegian giant Statoil has also said it may reconsider plans to drill off Alaska, and has already delayed its 2015 campaign. Statoil also holds minority interests in some of ConocoPhillips' Chukchi licenses.
Upstream reported in February that drilling contractor Noble Corp had agreed to a deal with ConocoPhillips for the newbuild jack-up Houston Colbert to start operating in Alaska in the fourth quarter of this year.
The rig, currently under construction in Singapore, would be on contract for a year at a dayrate of $235,000, Noble said in a fleet status report.
ConocoPhillips was preparing to get approval to drill up to two wells at its Devil’s Paw prospect in the Chukchi.
The company was awarded 98 exploration lease tracts in the Chukchi Sea Outer Continental Shelf in 2008.