According to a press release delivered by Royal Dutch Shell Plc, the company is abandoning its oil and gas exploration in Alaska’s Arctic waters. The decision to close up came with discouraging results of drilling in the Chukchi Sea and high costs of works.
The company failed to discover enough crude in the exploratory well, known as Burger J, to continue running the project. The carrying value of Shell's Alaska position is $3 billion, with a further $1.1 billion of future contractual commitments.
This June, the US government gave the UK company permission to start exploratory drilling in the Chukchi. Shell spent over $7 billion on the effort. The company had already gained permission in 2012 after discovering an oilfield in that area of the Arctic Ocean in 1986. However, ice moves disrupted the operation of drilling rigs that time.
Experts estimate that the Chukchi sea basin could contain from 24 to 26.6 billion barrels of black gold. That could be enough to meet the needs of the US crude production in next four years.
The project sparked a wave of protest among environmental groups, which feared that it could lead to ecological disaster.
