Shell to cease further exploration in Alaska

28 Sep 2015 | Author: | No comments yet »

Shell ceases Alaska Arctic drilling after exploratory well disappoints.

This Jan. 7, 2013, photo shows the Shell floating drill rig Kulluk in Kodiak Island, Alaska’s Kiliuda Bay as salvage teams conduct an in-depth assessment of its seaworthiness. (James Brooks/Kodiak Daily Mirror via AP, File) ANCHORAGE, Alaska — 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. The oil and gas company pressed ahead with its multibillion-dollar exploration program offshore Alaska this summer despite tumbling oil prices and strident opposition from environmental groups concerned that drilling in the region could cause an ecological disaster.

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. And though in the longer term, Shell sees important exploration potential in the basin, it said it would cease further exploration offshore Alaska for the foreseeable future.

The Anglo-Dutch company expects to book charges in its accounts as a result of this decision, and will give more information at the time of its third-quarter earnings, due Oct. 29. 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. 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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