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Shell Withdraws Bid for Norwegian Arctic Leases

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By Reuters 2016-04-04 20:54:16

Oil major Royal Dutch Shell has pulled its application from Norway's Arctic-focused oil licensing round, the firm said on Monday, in a blow to the Nordic country's ambitions to explore for oil and gas in its northern offshore areas.

"The decision is part of an optimisation of Shell's global portfolio following the acquisition of BG and a persistently low oil price," the company's Norwegian unit said in a statement. "Norway remains one of our core areas."

In December the Norwegian oil ministry said Shell was among the companies that had applied for drilling permissions in the so-called twenty-third round, a licensing round set to move the search for hydrocarbons closer to the country's border with Russia.

As recently as last month, the head of Shell's business in Norway had told Reuters the firm had hoped that it could begin drilling in 2017 if it won licenses in the licensing round.

The Norwegian oil and energy minister said Shell's decision had no implication for the conduct of the licensing round. The awards would still be announced before July, he said.

"We have many other competent companies that are competing hard for our promising, new exploration areas," Tord Lien said in an emailed statement.

"Shell has told us that the decision is based on short-term cash flow priorities and consolidation after the acquisition of BG."