Norwegian company Statoil is exiting its Alaskan operations and will close its Anchorage office, citing weak exploration results and lack of profitability in Alaska in the low oil-price period.

Statoil exiting Alaska operations

STAVANGER, November 17, 2015 – Norwegian company Statoil is exiting its Alaskan operations and will close its Anchorage office, citing weak exploration results and lack of profitability in Alaska in the low oil-price period.

The company joins Shell, which also abandoned its offshore drilling project in Alaska in September after spending $2.1 billion to acquire more than 250 leases in the Arctic region but returning with poor finds.

The challenging conditions in Alaska increase exploration and production costs, with the budget break-even price of a barrel of oil reaching $117 in 2015 fiscal year. The price of a barrel of brent crude dipped as low as $43.6 in November 2015.

Statoil will abandon 16 leases and its stake in 50 more operated by US-based ConocoPhilips in Chukchi Sea, despite estimates that it holds 15 billion barrels of crude oil and 2.26 tcm (76 tcf) of gas to seek profitability in other assets in its portfolio.

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