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Shell Scraps Arctic Exploration

Shell Scraps Arctic ExplorationShell Scraps Arctic Exploration

The oil giant is to halt drilling at the Burger J well in the US Arctic, saying it cannot justify the expense due to low oil prices. Shell had won the controversial permission to explore the ice waters last month.

Drilling efforts are to end for the "foreseeable future", Royal Dutch Shell said in a statement on Monday, blaming the "high costs associated with the project", DW reported.

The surprise move came just a month after it won a new permit to explore the Arctic waters off Alaska in the Burger J well in Chukchi Sea, despite opposition from environment groups and disagreement among some Democrat party leaders.

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 Anglo-Dutch oil giant said on Monday it did not find sufficient amounts of oil and gas in the well, located 240 kilometers from the northernmost American city of Barrow, to warrant further exploration.

The Arctic is estimated to hold about 22% of the world's remaining oil and gas reserves underground and underwater, according to the US Energy Information Administration.

Shell has spent $7 billion hunting for offshore oil wells, according to the Washington Post.

 

Financialtribune.com