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Statoil: No Problem Walking Away From Arctic Drilling if Too Risky

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The head of Statoil ASA's international-exploration business said his company would have no problem walking away from drilling in the U.S. Arctic Ocean if it proved to be too risky.

Tim Dodson, executive vice president, global exploration, for the Norwegian oil and gas firm, said his company has closely watched the drilling program started last summer by Royal Dutch Shell PLC and wished that company had been able to return to drill there this summer. Damage to Shell's two arctic drilling rigs led the company to cancel its return to the Arctic Ocean this summer.

But in an interview Tuesday at the IHS CERAWeek conference in Houston, Mr. Dodson said Statoil is still assessing whether it will start its own U.S. Arctic drilling in 2015, at a later date, "or if we won't drill at all."

"We have no intent on drilling if we can't do it safely and sustainably," Mr. Dodson said.

Statoil was the high bidder on 16 leases in the Chukchi Sea, off the Northern coast of Alaska, during a 2008 lease sale in U.S. federal waters. The company had planned to start drilling in 2014 but delayed those plans by a year last summer when Shell said it would cut its drilling plans from six full wells to two partially drilled wells due to equipment issues.

Statoil and other companies have been watching Shell's Arctic efforts very closely in order to learn what sorts of challenges they may face. ConocoPhillips Corp. said it is still planning to drill in the U.S. Arctic Ocean in 2014.

"It was the right thing to do, to take a more measured approach," Mr. Dodson said of Statoil's decision to delay.

Copyright (c) 2012 Dow Jones & Company, Inc.

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