Shell Eyes Arctic Drilling this Summer

Oil major Shell wants to revive its Arctic oil drilling programme this year after a near two-year suspension, angering environmentalists who say the risk of an oil spill is too high.

Remote and costly to develop, the Arctic is estimated to contain 20 percent of the world's undiscovered hydrocarbon resources and despite fierce opposition, plans for drilling north of the Arctic Circle are under way in the United States, Russia and Norway.

Shell, Europe's largest energy firm, is intent on restarting its Arctic drilling campaign in Alaska's Chukchi Sea this summer. It was suspended in early 2013 following the grounding of a drilling rig.

"Will we go ahead? Yes if we can. I'd be so disappointed if we wouldn't," Shell Chief Executive Ben van Beurden told journalists at the company's fourth quarter results conference in London.

The resumption depends on having the logistics in place, receiving necessary permits and fending off a number of legal challenges, he said.

Opposition to the Arctic drilling has been fierce.

"Shell is taking a massive risk doggedly chasing oil in the Arctic, not just with shareholder value, but with the pristine Arctic environment," said Greenpeace environmental campaigner Charlie Kronick in a statement.

"No company is able to operate safely in this remote, fragile ocean where the nearest rescue fleets are hundreds of miles away."

The Anglo-Dutch company has already spent $1 billion on preparing its Arctic drilling work and it is costing Shell several hundred millions of dollars a year even without progressing with drilling, Chief Financial Officer Simon Henry said.

Shell said time was pressing for oil production to start in Alaska as capacity use of a pipeline connecting the remote region to the main North American oil system was falling close to levels at which it cannot operate.

"That means not only new projects wouldn't go ahead but the existing (ones) won't be able to operate either," Henry said.

 

By Karolin Schaps and Ron Bousso