Oil companies leave the scene in the Arctic, after having invested millions of Euros

Oil companies leave the scene in the Arctic, after having invested millions of Euros

11/05/2016 source “DN”

After a total investment of about 2,2 billion Euros in risky oil prospecting works in the Arctic Ocean, the oil companies that had bought licenses to the United States to make these drillings are now giving up, one after another, the oil exploration in the region. The high costs of the operations, combined with the current low price of oil, are the determinants of this outcome. The departure of the oil companies off the Arctic happened in the last weeks before the end of April.

For the oceans international advocacy organization Oceana, which opposed to these projects from the beginning and which mobilized the world opinion against them, warning of the high environmental risks, this is good news. “If all goes as expected, today [yesterday] marks the end of the environmental and economic dangerous intentions to drill the Arctic Ocean,” said the director of Oceana, Michael LeVine, quoted by international news agencies.

One of the companies that now quits is the Anglo-Dutch Shell, which after receiving the green light from the US federal government, made surveys last year in the Chukchi Sea, 110 kilometres off the coast of Alaska. The survey results seem to have been a disappointment and the company formalized its resignation to oil exploration in the area before May 1, in time to avoid the payment of the rent to the United States to continue to use the operating license. According to the spokesman of the company, Curtis Smith, this action “is consistent with our earlier decision of not exploring offshore in Alaska in the foreseeable future”.

But Shell is not the only one to leave in these circumstances. For the same reasons – the high cost of investment for insufficient revenues due to the decline in the oil price and the expiry date of the incomes of offshore lots – other oil companies involved in this race also abandoned their prospecting and oil exploration projects. According to the information referred by Oceana, who had access to it under the “Freedom of Information Act” in force in the United States, the other companies that gave up are ConocoPhillips, Statoil and Iona Energy.

In January this year Oceana delivered to the US government a formal written request to reconsider the award of new operating licenses energy resources off the coast of Alaska. Among the arguments for the need to halt the new licenses, Oceana called environmental risks and the possibility of accidents, remembering the catastrophe caused by the spillage on the Deepwater Horizon, in the Gulf of Mexico, in 2010.

In adverse weather conditions and extreme temperatures as are the Arctic, accident risks are there even higher, justify the environmentalists. The dream of finding oil in the Arctic seems so be close to a positive outcome in favour of the planet.