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Shell suspends Arctic oil exploration activities (United States)

Shell has decided to suspend oil and gas exploration activities off Alaska, after drilling at the Burger J well proved disappointing.

In August 2015, the company received approval from the US government to drill an exploratory well into oil-bearing rock below the ocean floor in the Arctic Ocean. Shell found indications of oil and gas in the Burger J well but in insufficient quantities to warrant further exploration in the Burger prospect. The group will seal and abandon the well and cease further exploration activity in offshore Alaska for the foreseeable future.

Shell has already committed about US$7bn into the Arctic projects and planned to invest a further US$1bn, based on estimations that the Arctic could hold more than 20% of the world's undiscovered oil and gas resources. However, unpredictable federal regulatory environment in offshore Alaska and high development costs in a context of low oil prices make the development unprofitable.