Shell’s departure will mean no drill rigs in Chukchi Sea

The US Geological Survey said in 2008 that within the Arctic circle there are 90 billion barrels of oil and vast quantities of natural gas waiting to be tapped, most of it offshore. “That is not the case”. In December, Chevron also suspended Canadian Arctic exploration, citing uncertainty over oil prices.

The announcement comes as Shell’s window for drilling in the brief Arctic summer draws to a close. “The “unpredictable regulatory environment” that forced Shell out of the Arctic is otherwise known as massive pressure from more than seven million people”.

Shell had planned at least one more year of exploration with up to six wells drilled.

Even after ConocoPhillips and the Norwegian oil giant Statoil suspended their Alaskan offshore drilling operations Shell carried on, asserting that the Chukchi Sea potentially represented the next great global oil find.

“On the other hand, in a US$50 oil-price environment it’s not so bad to abandon that search because it’s expensive”.

Shell lost confidence it could make a profit anytime in the foreseeable future on the oil that’s there. “We have to pick up the pieces from this and move forward”.

Environmentalists, meanwhile, welcomed news that Shell will suspend its operations.

“The Obama administration dodged a bullet”, said Donaghy. While none of these suits has yet put a permanent stop to the drilling, the ongoing litigation delayed Shell’s ability to explore the area until this summer. The drilling rig made it to the Arctic, drilled a test well, and came up with “disappointing” results. “A lot of money was spent and those multipliers are pretty big”.

Shell has had problems it could not blame on regulators. Ship construction ran behind schedule.

This year, one of its icebreakers was on its way out of Dutch Harbor when it tore a three-foot hole in its hull.

Shell had warned that it may not find oil in the area, despite estimates that the region holds the equivalent of 29 billion barrels of oil and gas.

Without resource development both on- and off-shore, he said they’re facing “a fiscal crisis beyond measure”.

The Fennica went to a dry dock in Oregon for permanent hull repairs before returning to the Arctic. Owners of the leased Noble Discoverer, which drilled in the Chukchi and is back this year, pleaded guilty to eight felony maritime safety counts and paid a $12.2 million fine. It did not disclose the size of the charge but said the accounting value of the project is $3 billion, with another $1.1 billion in commitments to contractors. Details are expected in the company’s third-quarter financial reports in a month.

Fried said the “perception” that Shell’s departure will have a big impact on the state may have consequences down the road that are hard to calculate now.

“That’s incredible. That’s huge”, she said. But I – you know, I think the company had already invested substantially, and they wanted to see that process through.

Royal Dutch Shell has abandoned a contentious Arctic drilling campaign off the coast of Alaska and is preparing to take billions of dollars in writedowns after its exploration efforts failed to make a significant discovery.