Shell Halts Alaska Oil Drilling After Disappointing Well Result

28 Sep 2015 | Author: | No comments yet »

Royal Dutch Shell plc: Shell Updates on Alaska Exploration.

ANCHORAGE, Alaska (AP) — Royal Dutch Shell will cease exploration in Arctic waters off Alaska’s coast following disappointing results from an exploratory well backed by billions in investment and years of work. Shell USA’s president, Marvin Odum, said in an announcement early on Monday in the Netherlands that it was a disappointing outcome for that part of the Chukchi sea basin.

The oil and gas giant said that while it found indications of oil and gas at the Burger J well, in Alaska’s Chukchi Sea, these were insufficient to warrant further exploration. Shell safely drilled the well to a total depth of 6800 feet this summer in a basin that demonstrates many of the key attributes of a major petroleum basin. Shell added that it expects to book charges in its accounts as a result of this decision and would give more information alongside its third-quarter earnings, which are due to be reported on Oct. 29. Environmental groups oppose Arctic offshore drilling and say industrial activity and more greenhouse gases will harm polar bears, walrus and ice seals.

The balance sheet carrying value of Shell’s Alaska position is $3 billion, with a further $1.1 billion of future contractual commitments, Shell said. The well will be sealed and abandoned in accordance with U.S. regulations. “The Shell Alaska team has operated safely and exceptionally well in every aspect of this year’s exploration program,” said Marvin Odum, Director, Shell Upstream Americas. “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 US. Companies over which Shell has joint control are generally referred to as “joint ventures” and companies over which Shell has significant influence but neither control nor joint control are referred to as “associates”.

The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. All forward-looking statements contained in this release are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2014 (available at http://www.shell.com/investor and http://www.sec.gov ). Enquiries Shell Media Relations International: +44-207-934-5550 Americas: +1-713-241-4544 Shell Investor RelationsEurope: + 31-70-377-4540 North America: +1-832-337-2034

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