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Citing low oil prices and financial uncertainty, Chevron has shelved a plan to drill offshore in the Canadian Beaufort Sea, Reuters reports.

The company sent a letter to Canada’s National Energy Board on Wednesday saying it is dropping its plan to drill in the EL 481 block, about 155 miles northwest of Tuktoyaktuk, Northwest Territories, and thus does not need any modification to that agency’s relief-well rule.

The NEB, which oversees offshore oil development in the Canadian Arctic, has been asked by Chevron and other companies to allow exceptions to a decades-old rule requiring companies to amass capabilities for a same-season relief well in the event of a well blowout. Chevron and other companies planning to drill in the offshore Beaufort argued that the rule is not practical for that Arctic area. Chevron argued earlier this year that it could not assess the economic viability of its drilling project without a favorable decision from the NEB on the same-season relief-well rule.

Another group, a joint venture led by Imperial Oil, is also planning to drill in the Canadian Beaufort at a prospect about 75 miles off the coast of the Northwest Territories.

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Yereth Rosen

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