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Shell Suspends Arctic Drilling in Alaska

Oil and gas found in the Burger J well are not sufficient to warrant further exploration.
September 29, 2015

​HAGUE, The Netherlands – Shell announced that it will halt Arctic drilling in Alaska, stating that the company has not found sufficient oil and gas in its Burger J well to warrant further exploration. The well will be sealed and abandoned in accordance with U.S. regulations.

The Burger J well is approximately 150 miles from Barrow, Alaska, in about 150 feet of water. Shell safely drilled the well to a total depth of 6,800 feet this summer in a basin that demonstrates many of the key attributes of a major petroleum basin. For an area equivalent to half the size of the Gulf of Mexico, this basin remains substantially under-explored. 

“The Shell Alaska team has operated safely and exceptionally well in every aspect of this year's exploration program,” said Marvin Odum, director of Shell Upstream Americas. “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. However, this is a clearly disappointing exploration outcome for this part of the basin.”

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 company expects to take financial charges as a result of this announcement. The balance sheet carrying value of Shell's Alaska position is approximately $3.0 billion, with approximately a further $1.1 billion of future contractual commitments. An update will be provided with the third quarter 2015 results.