Shell stops Arctic activity after 'disappointing' tests


Royal Dutch Shell has stopped Arctic oil and gas exploration off the coast of Alaska after "disappointing" results from a key well in the Chukchi Sea.

In a surprise announcement, the company said it would end exploration off Alaska "for the foreseeable future".

Shell said it did not find sufficient amounts of oil and gas in the Burger J well to warrant further exploration.

The company has spent about $7bn (£4.5bn) on Arctic offshore development in the Chukchi and Beaufort seas.

"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," said Marvin Odum, president of Shell USA.

"However, this is a clearly disappointing exploration outcome for this part of the basin."

'Risky endeavour'

Lord Browne, former BP boss and government adviser, told the BBC that the Arctic "is a very risky place [to explore] and very expensive to develop, so there are probably easier places to go".

Indeed some analysts suggested Shell might give up on the Arctic completely.

"It is possible that Shell might almost be relieved as they can stop exploration for a legitimate operational reason, rather than being seen to bow to environmental pressure," Stuart Elliott from energy information group Platts told the BBC.

"With the oil price around $50 a barrel, it was a risky endeavour with no guarantee of success.

"You could argue that this has been bad for Shell's reputation and it wouldn't be a big surprise if they abandoned Arctic drilling altogether."

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