Chevron Corp. is putting on indefinite hold plans to drill in Canada’s Beaufort Sea because of “economic uncertainty” in the industry.

In a letter sent Wednesday to Canada’s National Energy Board (NEB), Chevron Canada Ltd. said it was withdrawing from a hearing regarding a same-season relief well (SSRW) process for Exploration License (EL) 481 block. The block is about 250 kilometers (155 miles) northwest of Tuktoyaktuk, Northwest Territories.

“On behalf of Chevron, we write to advise the board that due to a number of factors, including the level of economic uncertainty in the industry, Chevron has put its drilling plans for EL 481 on hold indefinitely,” wrote attorney Shawn H.T. Denstedt of Osler, Hoskin & Harcourt LLP. “Unfortunately, as a consequence, Chevron will not be proceeding with an application for an advance ruling on whether Chevron’s drilling plans for EL 481 meet or exceed the intended outcome of the board’s SSRW requirement. Chevron will continue to monitor regulatory applications by other operators in the region.”

The San Ramon, CA-based oil major has been planning to drill the well since 2009, with development scheduled over the next five years, according to NEB filings (see Daily GPI, Oct. 3, 2011; Aug. 9, 2010). Chevron holds two licenses to explore Canada’s Beaufort Sea, with 100% interest in EL 481 and a 60% stake in another with Statoil ASA. Last year Chevron evaluated 3-D seismic data on the Statoil joint development.

A separate joint venture in the Beaufort is in the works by Imperial Oil Ltd., parent ExxonMobil Corp. and BP plc. Imperial said Wednesday that it has not changed its plans to drill in the region, but a final investment decision has not been made.

Chevron’s Beaufort drilling project is considered one of the largest to date to be halted since oil prices began to plunge. However, Chevron and the Imperial project also are facing opposition to the Beaufort drilling from environmental groups led by the Natural Resources Defense Council (see Daily GPI, Aug. 4). As well, the operators had asked NEB to consider “equivalent” alternatives to the SSRW requirement of backup drilling capacity in the event of a blowout — rules put in place following the Macondo well blowout in the Gulf of Mexico. Imperial and Chevron had told NEB that deepwater Beaufort drilling applications would be a waste of time — and would not be made — unless they were allowed to use substitutes deemed to be equivalent to SSRWs.

Chevron in earlier filings with NEB said it had made significant capital outlays in the region. Chevron paid an estimated C$103.3 million for the rights to explore about 508,000 acres, or 206,000 hectares, in the Beaufort.

ConocoPhillips, the largest independent in the United States, and super independent Marathon Oil Corp. each have cut their 2015 capital spending plans by 20%. Other U.S. and Canadian independents also have announced plans to cut back capital spending drastically in 2015.