Shell abandons Arctic drilling

Insufficient oil and gas found at exploration well

Shell has cancelled drilling for oil and gas in the Arctic for the “foreseeable future” because it has found insufficient reserves at its exploration well in the Burger prospect off the coast of Alaska.

The controversial project, which started three years ago, has attracted the anger of environmentalists globally, who object to both the risk of damaging the Arctic environment and the further exploitation of fossil fuel resources adding to climate change.

Protests have included a blockade of kayaks in Seattle, US, to prevent drilling rigs from leaving port and the installation of a polar bear outside the Shell head office in London.

The company has already started to remove equipment and workers from the area. The well will be sealed and abandoned, although the company will continue to hold the % working interest in the are of the Chukchi Sea.

Marvin Odum, director of Shell Upstream Americas, said: "The Shell Alaska team has operated safely and exceptionally well in every aspect of this year's exploration program. 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. However, this is a clearly disappointing exploration outcome for this part of the basin.”

The company also cited high costs and an “unpredictable regulatory environment” as other reasons for stopping exploration activities.

Greenpeace UK executive director John Sauven said: “Big oil has sustained an unmitigated defeat. The Save the Arctic movement has exacted a huge reputational price from Shell for its Arctic drilling programme. And as the company went another year without striking oil, that price finally became too high. They’re pulling out.”

“Now President Obama should use his remaining months in office to say that no other oil company will be licenced to drill in the American Arctic.