Royal Dutch Shell Oil will halt oil drilling in the Arctic after an initial exploratory well in the Chukchi Sea produced weak results.
The Burger J well was drilled 6,800 feet in a basin that had company officials thinking they were on top of a significant reserve. Even though some indications of oil and gas there wasn’t enough to continue investing in the site amid the contentious regulatory resistance of the area. Shell will seal the well and abandon the site.
“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 U.S.,” Marvin Odum, president of Shell USA, said in a statement. “However, this is a clearly disappointing exploration outcome for this part of the basin.”
The failure to find oil is a major setback for Shell. The company was hoping that this new arena of exploration would yield long reaching profits. Environmentalists have a more relieved feeling.
“That’s incredible,” said Margaret Williams of the World Wildlife Fund in Anchorage. “All along the conservation community has been pointing to the challenging and unpredictable environmental conditions. We always thought the risk was tremendously great.”
Shell has invested billions to get to this point in the Chukchi Sea and still have interest in further exploration. The oil company had the support of Alaska officials and business leaders have endorsed Shell for oil exploration in the area to bolster the trans-Alaska pipeline, which is now functioning at about one-quarter capacity.
Highlighting many of environmentalist’s concerns of Arctic exploration, one of Shell’s drilling vessels had some safety issues working in the Arctic. The ship broke away from its towline in the Gulf of Alaska and ran aground near Kodiak Island. A $12.2 million fine was paid by sub-contractor owners of the Noble Discoverer, after pleading guilty to eight felony maritime safety counts.