Chevron delay met with disappointment, but not surprise

News that Chevron Canada is indefinitely delaying its plan to drill for oil in the Beaufort Sea, about 250 kilometres northwest ofTuktoyaktuk, is hardly being met withsurprise in N.W.T.

Early in the year, months before the price of oil dropped by as much as 40 per cent,ConocoPhillipsand Husky Energy announced they would not return to the territory's central Mackenzie Valley in 2015 for another round of exploratory drilling.

"It was almost prophetic," said David Ramsay, N.W.T.'s ministerof Industry, Tourism and Investment, of those companies' decisions. "It's almost like they knew something was coming."

MervenGruben, aTuktoyaktukbusinessperson and former mayor of the hamlet, says he did know somethingwas coming.

"I heard this was going to happen a few months ago," he said. "And [Chevron]actually pulled the plug on it."

Tuktoyaktukhas been positioning itself to take advantage of an assumed stream of offshore activity. A recent paper sponsored in part by the territorial government recommends the development of a deepwater port to do just that.

Grubenis confident such a port will be built regardless of the state of offshore exploration, citing an uptick in traffic through the Northwest Passage.

"It's no big deal for us," saidGrubenof Chevron's delay. "It's only a $100 million that they bid on this one.

"You look at the big boystheBPsand Imperials that bid a billion and half a billionthose are theguys who are stillgung-hoto go."

Imperial Oil has confirmedit has not altered its own exploration plansfor the Beaufort Sea.

Ramsay was recently in Calgary, where he spoke with oil and gas companies with projects in N.W.T. He says there could be more bad news on the way.

"[Chevron's] not going to be the last company that's going to have to make a decision on where dollars are being spent in a new environment where oil prices are $50 to $60 a barrel. Many companies will be cutting budgets."

On the same day Chevron made its announcement, Husky said it's slashing its 2015 capital budget by about $1.7 billion.