The global energy giant Royal Dutch Shell announced Monday that it will cease its oil exploration activities in the Arctic due to disappointing results.
The Anglo-Dutch company said in a statement that it has successfully drilled the Burger J exploration well, located in the U.S. state of Alaska’s Chukchi Sea, and found indications of oil and gas in the well this summer.
However, these indications in the well were 'not sufficient to warrant further exploration in the Burger prospect,' Shell said, adding the well will be sealed and abandoned.
'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,' the statement read.
On Aug. 17, Shell gained final approval to begin drilling in the Arctic from the U.S. Interior Department's Bureau of Safety and Environmental Enforcement after months of deliberation.
Despite concerns and warnings from environmental groups, U.S. President Barack Obama also supported drilling in the Arctic, and said on Aug. 29 that the U.S. economy 'still has to rely on oil and gas.'
Although Shell is ceasing its exploration in the Arctic, the company has left the door open to return to the region in future due to its strategic significance.
'This is a clearly disappointing exploration outcome for this part of the basin,' Marvin Odum, director of Shell Upstream Americas, said in the statement.
'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.,' he added.
By Ovunc Kutlu
Anadolu Agency
ovunc.kutlu@aa.com.tr