Chevron has scrapped plans to drill a deepwater well in Canada’s Arctic Beaufort Sea, citing economic uncertainty due to the sharp decline in oil prices.

The company has submitted a letter to Canada’s National Energy Board (NEB) withdrawing from a hearing on Arctic drilling rules.

"Chevron planned to drill the EL481 offshore block, 250km north-west of Tuktoyaktuk, Northwest Territories."

Chevron planned to drill the EL481 offshore block, 250km north-west of Tuktoyaktuk, Northwest Territories.

According to Reuters, Chevron said in its letter to the regulator, which was confirmed by a company spokesman, the company has put its drilling plans for EL481 on hold ‘indefinitely’.

The filings with the NEB reveal that Chevron planned to drill the prospect by 2020.

Chevron holds two exploration licenses in the Beaufort, holding EL481 outright and controlling 60% in the other alongside Statoil.

The company had earlier outlined expectations to have highly significant capital outlays in the area.

Chevron paid more than C$103m for the rights to explore the 508,000 acre block.

Meanwhile, Imperial Oil is planning to go ahead with its plans to drill in the Beaufort Sea in partnership with BP.

Imperial Oil and BP are yet to make a final decision on the planned drilling campaign, which is expected to start in 2020.