Canada will not extend the existing Arctic offshore oil exploration licenses of the oil companies, following the government policy of suspension of new oil and gas drilling leases. The license for drilling exploration at the Beaufort Sea were granted to BP, Conoco-Phillips, Imperial Oil Resources Ventures, Chevron Canada and Franklin Petroleum Canada with expiration between 2019 and 2023. The decision for not renewing the offshore oil exploration licenses follow the last month agreement between Canada and the US to suspend drilling in Arctic waters. Canadian government decided that suspension will be for five years, but ban period can be extended after estimating the economical and environmental impact of the Arctic offshore oil production.
The total worth of the five affected licenses is 1.4 billion USD and local industry pledged against the decision. According to the labor organizations the suspension of Arctic drilling may cause growth of unemployment in certain regions, as well as stop the economic growth.
The Beaufort Sea contains major gas and petroleum reserves beneath the seabed, a continuation of proven reserves in the nearby Mackenzie River and North Slope.
Drilling in the Canadian Arctic turned out to be expensive and dangerous. The geology of the Canadian Arctic turned out to be far more complex than oil-producing regions like the Gulf of Mexico. It was discovered to be gas prone rather than oil prone (i.e. most of the oil had been transformed into natural gas by geological processes), and most of the reservoirs had been fractured by tectonic activity, allowing most of the petroleum which might at one time have been present to leak out.