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Shell ended its $7 billion Arctic venture after the exploratory well it drilled in Alaskan waters of the Chukchi Sea failed to find significant amounts of oil and gas.
The oil bust has forced Shell and its rivals to recalibrate the timing and affordability of projects around the world.
The company says it’s walking away from oil exploration in U.S. Arctic waters for the “foreseeable future,” but it’s keeping its options open.
Shell’s decision last month to halt offshore drilling in the Chukchi and Beaufort seas raised questions about the need for the port project aimed primarily at reducing travel costs for oil and gas support vessels.
The Interior Department announced it was canceling government auctions of drilling rights in the Chukchi and Beaufort seas, previously scheduled for 2016 and 2017 respectively. At the same time, it formally rejected bids by Statoil and Shell for more time to search for crude under their existing Arctic leases.
Repsol sold stakes in development and exploratory acreage in northern Alaska to its partner, Armstrong Oil & Gas Inc., for more than $800 million, according to a statement from Armstrong.
Shell’s aggressive bidding for drilling rights in the Chukchi Sea in 2008 put the company on a trajectory that ended with its $7 billion bust in the Arctic Ocean.
Although other gravel islands have been built in the Beaufort Sea, Hilcorp’s proposed Liberty project would be the first oil production facility located entirely in federal waters off the Alaska coast.
Environmentalists say there is a clash between Shell’s exploratory oil drilling in the Chukchi Sea and Obama’s visit to survey shrinking glaciers and speak with coastal residents worried about rising seas.
The records, provided by the U.S. Coast Guard in response to a Freedom of Information Act request, also describe a botched fire drill by the crew of another Shell-contracted drilling rig months before it began boring an exploratory oil well in the Chukchi Sea.