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Shell abandons oil exploration in Arctic Ocean

Activists briefly blockaded a Shell icebreaker in Portland, Oregon, USA in July 2015.
Activists briefly blockaded the icebreaker MSV Fennica from leaving the port of Portland, Oregon, in the USA, to join Shell's Arctic Ocean drilling fleet. Fennica had been in port for repairs after gashing its hull while leaving Dutch Harbor, Alaska for the Chukchi Sea in early July.

Results of its multi-billion dollar efforts in the Chukchi Sea have been “clearly disappointing,” states the oil giant.

Shell Oil announced on Monday that the firm will cease exploratory drilling in Alaska’s Chukchi Sea “for the foreseeable future.”

The firm said it detected signs of oil and gas in the lease area—known as the Burger prospect and located about 135 kilometers northwest of the coastal town of Wainwright.

But “these are not sufficient to warrant further exploration” of the area, Shell said in a statement, given the high cost of the project as well as “challenging and unpredictable federal regulatory environment in offshore Alaska.”

Shell has sunk roughly $7 billion over seven years into achieving a major oil strike in the Arctic Ocean. 

This year’s operations were sited just 90 kilometers southwest of Hanna Shoal, a biological hotspot that the Obama administration has made off-limits to oil and gas exploration, and 725 kilometers west of the U.S. Arctic National Wildlife Refuge.

Shell’s announcement came just as it hit the deadline to wrap up its 2015 operations in the Chukchi Sea under permit terms set by the U.S. Department of Interior’s Bureau of Ocean Energy Management.

The agency toughened safety requirements for Shell’s Arctic Ocean oil exploration in response to the equipment failures, marine accidents, and violations of environmental protection rules that dogged Shell’s 2012 Arctic drilling season; as well as the Deepwater Horizon oil disaster in the Gulf of Mexico in 2010.

Shell’s announcement also came on further dips in the global price of oil, which has dropped about half in the past year on slow global economic growth and a supply glut.

Shell’s Arctic Ocean goals have been controversial in the United States. Protestors attempted to blockade Shell’s Arctic-bound vessels in Seattle, Washington and Portland, Oregon earlier in the year. Some conservation groups have castigated President Obama for allowing Arctic Ocean oil drilling to proceed, saying the approvals undercut Obama’s own policies and promises to combat climate change.