Shell spent upward of $7 billion US on offshore development in Chukchi, Beaufort seas
Royal Dutch Shell will cease exploration in Arctic waters off Alaska’s coast following disappointing results from an exploratory well it just completed.
Shell found indications of oil and gas in the well in the Chukchi Sea about 120 kilometres off Alaska’s northwest coast, the company said Monday in a release from The Hague, Netherlands. However, the petroleum was not in quantities sufficient to warrant additional exploration in that portion of the basin, the company said.
“Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the U.S.,” said Marvin Odum, president of Shell USA, in the announcement. “However, this is a clearly disappointing exploration outcome for this part of the basin.”
Shell will end exploration off Alaska “for the foreseeable future,” the company said.
The decision reflects the results of the exploratory well in the Burger J lease, the high costs associated with Alaska offshore drilling and the challenging and unpredictable federal regulatory environment in offshore Alaska, the company said.
Shell Oil Co. President Marvin Odum, seen on Sept. 2 in Anchorage, said it was “a clearly disappointing exploration outcome for this part of the basin.” (Mark Thiessen/The Associated Press)
Shell has spent upward of $7 billion US on Arctic offshore development in the Chukchi and Beaufort seas.
Monday was Shell’s final day to drill this year in petroleum-bearing rock under its federal permit. Regulators required Shell to stop a month before sea ice is expected to re-form in the lease area.
The company reached a depth of nearly 2,075 metres with the exploratory well drilling in about 45 metres of water.
Environmental groups oppose Arctic offshore drilling and say industrial activity and more greenhouse gases will harm polar bears, walrus and ice seals.
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