Shell abandons offshore Alaska oil exploration

The basin is roughly half the size of the Gulf of Mexico and Shell says it remains “substantially under-explored”.

Shell halted drilling in the area three years ago after a rig ran aground, leading to a temporary ban on exploration activities in the Arctic.

The decision to suspend Artic drilling comes after the negative financial statement, which is expected Shell to publish this week. It valued its Alaska balance sheet at $3bn, with a further $1.1bn in future contractual commitments. An update will be provided with the third quarter 2015 results.

Shell holds a 100% working interest in 275 Outer Continental Shelf blocks in the Chukchi Sea.

The company was granted final permission to begin explorations below the ocean floor at the Burger J well, which is located off the northwest coast of Alaska, in August of this year but have now chose to abandon the operation. 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.

Environmental activists hang up a banner on a Shell gas station sign to protest Shell’s Arctic oil drilling project in the north of Alaska. No word on where Shell will go next. “Drilling for oil there is inherently unsafe and will only drive the world deeper into the climate crisis”.

“For the climate, Shell won’t be locking in fossil fuel production we don’t need and can’t afford if we want to limit global warming”, Lawrence told the Fuelfix blog.

Royal Dutch Shell PLC said it was calling off exploration in offshore Alaska for the foreseeable future, after an exploratory well drilled to 6,800ft (2,100m) found oil and gas but not in sufficient quantities tp make exploration viable. Among their concerns is the harm they say that will be caused to the local wildlife from such actions.

“The UK Government must see the writing on the wall, and switch its support from fracking and oil to the renewable energy industry – or risk being stuck with outdated, redundant, unusable technologies”.

“What happens in the Arctic matters to all of us”.

“Greenpeace’s campaign to save the Arctic will continue with passion and increased strength”.

That was proof of Shell’s Arctic incompetence, critics said.

Hewson believes Shell’s dividend could come under threat, saying: “All the banks had healthy dividends and we know what happened to them, and the decline in the share price is making some investors rather twitchy”.

Environmentalists have criticised Shell’s drilling plans in the Arctic, which is home to sensitive populations of whales, walrus and polar bears.

While oil prices have dropped significantly in recent years and nations have pushed for cleaner energy sources, analysts predict that the world between 2030 and 2040 will need another 10 million barrels a day to meet growing demand, especially in developing countries, Ebinger said.