Shell has abandoned its controversial drilling operations in the Alaskan Arctic in the face of mounting opposition.
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.”
Shell is expected to take a hit of around $4.1bn as a result of the decision.
Part of those losses include the 2.1 billion that Shell paid in 2008 for leases to drill in the Chuckchi Sea.
Which may help to explain why President Obama was unable to block this exploration even though he has been very vocal about his commitment to renewable resources and addressing climate change in a serious manner.
This really should not come as a surprise since Shell really only had until today to complete this initial operation which was focused on finding deposits large enough to demonstrate that this was a financially viable enterprise.
Well this is good news for Alaska, good news for environmentalists, and good news for the planet.