Shell shocker on oil exploration off Alaska

The Polar Pioneer drilling rig sits docked at the Port of Seattle; demonstrators opposed to Arctic oil drilling rallied near the rig on May 18, 2015

AP

ANCHORAGE, Alaska -- Royal Dutch Shell PLC says it's ceasing exploration in offshore Alaska "for the foreseeable future."

The company says an exploratory well drilled to 6,800 feet found oil and gas but not in sufficient quantities.

Shell USA President Marvin Odum said in an announcement early Monday in The Netherlands that it's a disappointing outcome for that part of the Chukchi Sea basin.

Shell drilled in 150 feet of water about 80 miles off Alaska's northwest coast.

The exploratory well was the first in the Chukchi in 24 years.

The well "will be sealed and abandoned in accordance with U.S. regulations," Shell said.

Environmental groups oppose Arctic offshore drilling and say industrial activity and more greenhouse gases will harm polar bears, walrus and ice seals.

Over the summer, protesters in kayaks unsuccessfully tried to block Arctic-bound Shell vessels in Seattle and Portland, Oregon.

Shell has spent about $7 billion on Arctic offshore development in the hope there would be deposits worth pursuing.

In a statement, the company said, "For an area equivalent to half the size of the Gulf of Mexico, this basin remains substantially under-explored."

Odum said, "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 US. However, this is a clearly disappointing exploration outcome for this part of the basin."

The company said its decision to halt operations "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."