Royal Dutch Shell Plc will stop further oil and gas exploration offshore Alaska, citing high costs and “challenging” regulation for drilling in the region.
Shell forecast it will take related financial charges, according to a company statement on Monday. The balance sheet carrying value of its Alaska position is about $3 billion, with additional future contractual commitments of about $1.1 billion, The Hague, Netherlands-based energy explorer said.
The company will abandon the Burger J well in Alaska’s Chukchi Sea, saying indications of oil and gas weren’t sufficient to warrant further exploration. The company holds a 100 percent working interest in 275 Outer Continental Shelf blocks in the sea, according to the statement.
“Shell will now cease further exploration activity in offshore Alaska for the foreseeable future,” the company said. “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.”