Big Oil abandons US$2.5b in US Arctic drilling rights

Washington

AFTER plonking down more than US$2.5 billion for drilling rights in US Arctic waters, Royal Dutch Shell, ConocoPhillips and other companies have quietly relinquished claims that they once hoped would net the next big oil discovery.

The pullout comes as crude oil prices have plummeted to less than half their June 2014 levels, forcing oil companies to slash spending. For Shell and ConocoPhillips, the decision to abandon Arctic acreage was formalised just before a May 1 due date to pay the US government millions in rent to keep holdings in the Chukchi Sea north of Alaska.

The US Arctic is estimated to hold 27 billion barrels of oil and 132 trillion cubic feet o…