Shell ends offshore drilling in Alaska

President…

Shell is ceasing further exploration offshore Alaska after the company went bust on its Burger J prospect that will result in a multi billion dollar write-down.

The Anglo-Dutch company’s $7 billion of spending on exploration in the Arctic appears going down the drain, though the firm is keeping a stiff upper lip.

“The Shell Alaska team has operated safely and exceptionally well in every aspect of this year’s exploration program,” Shell director of Upstream Americas said in a statement.

Shell obtained its licenses to explore the Chukchi Sea in 2008 and pushed ahead with the project when oil prices were historically high-more than $100 a barrel. Some are anxious an oil spill would harm protected species while others are concerned about the cost after oil prices more than halved in a year.

Shares in Shell fell by 8.5p, or 0.55%, to 1,540p.

Monday was Shell’s final day to drill this year in petroleum-bearing rock offshore Alaska under its federal permit. Regulators required Shell to stop a month before sea ice is expected to re-form in the lease area. “Instead of opening a new carbon reserve within an invaluable ecosystem, the United States should use its position as Chair of the Arctic Council to discourage Arctic drilling and to promote Arctic Ocean safety, security and stewardship, all while guarding against the increasingly devastating impacts of climate change in this region”. They had a budget of billions, we had a movement of millions.

Oil giant Shell has brought an end to its controversial drilling programme off the coast of Alaska.

“That’s incredible. That’s huge”, the Anchorage World Wildlife Fund’s Margaret Williams told the AP. “All along the conservation community has been pointing to the challenging and unpredictable environmental conditions”. “Here’s hoping Shell leaves the Arctic forever”.

Environmentalists have criticised Shell’s drilling plans in the Arctic, which is home to sensitive populations of whales, walrus and polar bears. “Shell has enough resources already to take focus on in this environment”.

“The well will be sealed and abandoned in accordance with USA regulations”, the statement said, adding: “Shell will now cease further exploration activity in offshore Alaska for the foreseeable future”. It would appear that early indications of a large oilfield may have been overestimated and the company will have to take charges in the region of $US4.1bn, a sizeable sum at a time when revenues continue to get squeezed. The company was seeking to resume work halted in 2012 when its main drilling rig ran aground and was lost. “It is imperative that this victory becomes a long term one for the Arctic itself”, he said.