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Shell Abandons Arctic Oil Exploration

The drilling ship Polar Pioneer (right) and offshore supply vessel Harvey Supporter in Dutch Harbor in July 2015. Photo: Judy Patrick, Shell.

After sinking billions into offshore Arctic oil exploration, petroleum giant Shell Oil is closing up its exploratory wells in the Chukchi Sea and will “cease further exploration activity in offshore Alaska for the foreseeable future.”

The announcement was made on the Dutch oil giant’s website late Sunday night, bringing an end to Shell’s Arctic Alaska oil adventure after seven years and a $7 billion commitment.

The company drilled a 6,800-foot well into the ocean floor in its “Burger J” prospect, in about 150 feet of water in the Chukchi Sea roughly 150 miles west of Barrow. The company said in the Sunday release that they found “indications” of oil and gas, but they were “disappointing” and “not sufficient to warrant further exploration.”

A map of Shell's summer 2015 Alaska operations. Image: Shell.

A map of Shell’s summer 2015 Alaska operations. Image: Shell.

That well was “sealed and abandoned,” and—despite what the company calls “important exploration potential” in the area—the oil titan said the dry well signals an end to its roughly $3 billion dollar Alaska concern this year, which the company said also carried as much as $1.1 billion in future contracts.

Beyond the dry well, Shell said the decision to end its Arctic oil exploration is related to the high costs of the project and the “challenging and unpredictable federal regulatory environment” for offshore exploration in Alaska.

Monday was a key deadline for Shell’s Chukchi effort: it marked the end of the summer drilling season, although extensions of the company’s drilling permits into October were possible. The company now has to move its drill rigs, support vessels, and more—some of which are being staged near Kotzebue—out of the Arctic.

Despite its exit from the Arctic oil search, Shell still holds 275 outer continental shelf blocks in the Chukchi Sea. The company says the Chukchi basin is roughly “half the size of the Gulf of Mexico” and remains “substantially under-explored.”

3 Comments

  1. […] Two more quick resolutions were passed—naming new city holidays like “Extra Mile Day” on Nov. 1 and declaring “Childhood Cancer Awareness Week” during the week of Oct. 18-24—before the council finished their meeting with a reflection on Shell Oil’s move this week to abandon oil exploration in the Chukchi Sea. […]



  2. […] in the wake of Royal Dutch Shell’s “disappointing” oil search in the Chukchi Sea this summer, the Anglo-Dutch oil giant is suspending it’s Arctic operations “for the foreseeable future,” […]