UPDATE 2-In about-turn, Conoco shelves Alaskan Arctic drilling plan

Wed Apr 10, 2013 7:09pm EDT
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By Yereth Rosen

ANCHORAGE, Alaska, April 10 (Reuters) - ConocoPhillips shelved plans to drill exploration wells in the Chukchi Sea off Alaska next year due to U.S. regulatory uncertainty, a month after the company said it would press ahead with drilling there.

In another major step back from drilling in Arctic waters near the state, ConocoPhillips said on Wednesday it would not be prudent to invest in the Chukchi Sea now because of "evolving" federal regulations and permit standards, and it was unsure whether it would even be ready by 2015.

"We really don't know yet," said spokeswoman Natalie Lowman.

She said the company wanted to better understand the requirements from the government and other leaseholders before deciding. "We're not putting a timeline on it."

Conoco's decision follows Royal Dutch Shell Plc's announcement in February that it would not drill in Alaska's Arctic seas this year after a 2012 season that culminated in the grounding of its drillship in a storm.

Just over a month ago ConocoPhillips said it was still planning two exploration wells in the Chukchi Sea next year, reassuring the public that the situation would be different from Shell's.

In 2008, Conoco was awarded 98 exploration lease tracts in the Chukchi Sea. Previously, it held leases in the Beaufort Sea but has let those lapse, Lowman said. Shell had started drilling in both Arctic seas.   Continued...