Last week, Repsol, the last of a group oil companies which had invested billions of dollars in Arctic drilling rights in Alaska’s Chukchi Sea, abandoned its leases and sailed away. The Spanish drilling company gave up 55 leases and plans to drop the remaining 38 next year. Repsol had been preceded in abandoning Arctic drilling by Shell, ConocoPhillips, Eni, and Iona Energy.
Shell had invested a reported $7 billion in their failed attempt to drill in the environmentally sensitive region. Shell’s efforts resulted in environmental protests, multiple ship and drill rig groundings, repeated technical failures, and citations for safety and pollution violations. The finally succeeded in drilling one exploration well, which turned out to be a dry hole.
While Shell proved to be largely incapable of coping with the Arctic conditions, what ultimately doomed Arctic drilling was the price of oil. Shell began in the Arctic when oil was above $100 per barrel. When they left it was bouncing around $50 a barrel.