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

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. But it quietly held on to its 125 square miles in West Harrison Bay, in the state waters just offshore of the National Petroleum Reserve – Alaska.with the Alaska Department of Natural Resources in 2020, said it had identified several potential oil and gas accumulations and prospects.But to confirm the presence of commercially viable oil deposits, Shell would have to drill wells. In 2020, the company took an initial step in that direction, merging its 18 leases into a single unit.

That choice could have repercussions for Narwhal, a small, privately owned oil company whose majority stakeholder is a Texas-based family partnership, according to corporate filings with the state. “The department understands this area to be highly prospective,” said John Crowther, the department’s deputy commissioner.

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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 in response to global warming, experts say some of the state’s hard-to-tap oil prospects are becoming less attractive.
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