Royal Dutch Shell to cease Arctic drilling and offshore oil exploration in the Burger J well in Alaska

Clara Guibourg
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Environmentalists opposed Shell's Arctic drilling plans fiercely (Source: Getty)

Royal Dutch Shell will cease offshore oil exploration in Alaska, after the company announced plans to retreat from the Arctic due to high production costs.

Shell said in a statement it had “found indications of oil and gas in the Burger J well”, but that these were “not sufficient to warrant further exploration”.

The oil giant will leave the region “for the foreseeable future”, it said, because of the high cost of production in the area, as oil prices continue to tumble.

It's been a short-lived endeavour: the company's exploration in the Arctic was approved this spring and as been met with fierce opposition from environmentalists. Greenpeace's executive director Kumi Naidoo called this "a defining day for the Arctic":

It’s a huge victory for the millions of people who stood up against Shell and a disaster for other oil companies with interests in the region.

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.

The company expects to take financial charges as a result of this, to be disclosed in third quarter results.

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