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You can find the current article at its original source at http://www.theguardian.com/business/2015/sep/28/shell-ceases-alaska-arctic-drilling-exploratory-well-oil-gas-disappoints
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Shell abandons Alaska Arctic drilling | Shell abandons Alaska Arctic drilling |
(about 2 hours later) | |
Shell has abandoned its controversial drilling operations in the Alaskan Arctic in the face of mounting opposition. | Shell has abandoned its controversial drilling operations in the Alaskan Arctic in the face of mounting opposition. |
Related: The new cold war: drilling for oil and gas in the Arctic | |
Its decision, which has been welcomed by environmental campaigners, follows disappointing results from an exploratory well drilled 80 miles off Alaska’s north-west coast. Shell said it had found oil and gas but not in sufficient quantities. | Its decision, which has been welcomed by environmental campaigners, follows disappointing results from an exploratory well drilled 80 miles off Alaska’s north-west coast. Shell said it had found oil and gas but not in sufficient quantities. |
The move is a major climbdown for the Anglo-Dutch group which had talked up the prospects of oil and gas in the region. Shell has spent about $7bn (£4.6bn) on Arctic offshore development in the hope there would be deposits worth pursuing, but now says operations are being ended for the “foreseeable future.” | The move is a major climbdown for the Anglo-Dutch group which had talked up the prospects of oil and gas in the region. Shell has spent about $7bn (£4.6bn) on Arctic offshore development in the hope there would be deposits worth pursuing, but now says operations are being ended for the “foreseeable future.” |
Shell is expected to take a hit of around $4.1bn as a result of the decision. | Shell is expected to take a hit of around $4.1bn as a result of the decision. |
The company has come under increasing pressure from shareholders worried about the plunging share price and the costs of what has so far been a futile search in the Chukchi Sea. | The company has come under increasing pressure from shareholders worried about the plunging share price and the costs of what has so far been a futile search in the Chukchi Sea. |
Shell has also privately made clear it is taken aback by the public protests against the drilling which are threatening to seriously damage its reputation. | Shell has also privately made clear it is taken aback by the public protests against the drilling which are threatening to seriously damage its reputation. |
Related: Arctic drilling for 'extreme oil' is risky - and letting Shell do the work is reckless | Cindy Shogun | |
Ben van Beurden, the chief executive, is also said to be worried that the Arctic is undermining his attempts to influence the debate around climate change. | Ben van Beurden, the chief executive, is also said to be worried that the Arctic is undermining his attempts to influence the debate around climate change. |
His attempts to argue that a Shell strategy of building up gas as a “transitional” fuel to pave the way to a lower carbon future has met with scepticism, partly because of the Arctic operations. | His attempts to argue that a Shell strategy of building up gas as a “transitional” fuel to pave the way to a lower carbon future has met with scepticism, partly because of the Arctic operations. |
A variety of consultants have also argued that Arctic oil is too expensive to find and develop in either a low oil price environment or in a future world with a higher price on carbon emissions. | A variety of consultants have also argued that Arctic oil is too expensive to find and develop in either a low oil price environment or in a future world with a higher price on carbon emissions. |
In a statement today, Marvin Odum, director of Shell Upstream Americas, said: “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.” | In a statement today, Marvin Odum, director of Shell Upstream Americas, said: “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.” |
“Shell will now cease further exploration activity in offshore Alaska for the foreseeable future. This decision reflects both the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska.” | “Shell will now cease further exploration activity in offshore Alaska for the foreseeable future. This decision reflects both the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska.” |
Related: Greenpeace performs Arctic requiem in effort to touch hearts over Shell drilling | |
Reacting to the news, Greenpeace UK executive director John Sauven said: | Reacting to the news, Greenpeace UK executive director John Sauven said: |
“Big oil has sustained an unmitigated defeat. They had a budget of billions, we had a movement of millions. For three years we faced them down, and the people won. | “Big oil has sustained an unmitigated defeat. They had a budget of billions, we had a movement of millions. For three years we faced them down, and the people won. |
“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. | “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.” | “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.” |