Shell abandons North Slope oil leases, raising questions about the industry’s future in Alaska

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As the world pivots toward lower-carbon energy sources in response to global warming, experts say some of the state’s hard-to-tap oil prospects are becoming less attractive.

In your corner office, a team of executives has come to pitch you on a new, possibly lucrative drilling opportunity. It’s in a relatively politically stable country; the local tax regime is reasonable, if not generous. Other companies have found huge deposits in the area, and your own geologists are telling you that there’s likely a whole lot of oil in the ground. You’ve already leased the area.

But Narwhal lacks Shell’s enormous financial wherewithal — a crucial asset when the cost of drilling wells in remote parts of the North Slope can top $100 million. “A lot of stuff is coming together that suggests decreased investment in remote, Arctic areas for oil and gas. Alaska leadership has to understand this stuff is happening,” said Mark Myers, a former state natural resources commissioner who also once led the U.S. Geological Survey. “Worldwide events are overcoming us faster than we can manage it. Shell’s response should not be seen as a one-off.

Babski declined to address McKay’s comments about the “climate cultists,” and also did not directly answer a question about why Shell did not seek to sell the leases rather than return them to the state. A map of Alaska’s West Harrison Bay shared by oil company Narwhal with state land managers. Narwhal’s leases are in red, while Shell’s former leases are in green.had “summarily dismissed” at least a half-dozen of Narwhal’s formal proposals, since 2016, to either jointly drill for oil in the area, or to buy Shell’s leases outright.Narwhal officials did not respond to requests for comment, and Babski declined to comment on Narwhal’s assertions.

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Shell abandons North Slope oil leases, raising questions about the industry’s future in AlaskaAs the world pivots toward lower-carbon energy sources, experts say some of the state’s hard-to-tap oil prospects are becoming less attractive.
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