Shell scraps controversial offshore oil exploration in Alaska

The energy major began drilling in July, two months after U.S. President Barack Obama authorized Arctic oil drilling

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Anglo-Dutch energy giant Royal Dutch Shell said Monday it had scrapped its controversial offshore exploration in Alaska after failing to find sufficient quantities of oil and gas.

Shell announced that its Burger J well in the Chukchi Sea, off the northwest coast of Alaska, did not warrant further exploration, adding it would now stop its activities in Alaskan waters.

The energy major began drilling in July, two months after U.S. President Barack Obama authorized Arctic oil drilling, a decision that infuriated environmental groups.

"Shell has found indications of oil and gas in the Burger J well, but these are not sufficient to warrant further exploration in the Burger prospect," the London-listed group said in a statement.

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

It added: "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."

In reaction to Obama's decision in May, Greenpeace denounced the U.S. president and urged people to sign an online petition to block offshore Arctic drilling.

Justifying his move to allow Shell to drill in the area, Obama had described U.S. oil production an "important" source of energy.

However, Greenpeace described oil drilling in the region as a "terrible mistake" that could damage the fragile Arctic environment and potentially spark an ecological disaster.

The pressure group had vowed to fight Shell and urged Obama to stop the firm's exploration activities in the region.

Shell said on Monday that Alaska was still of major importance for the United States, but added it was disappointed with its exploration results.

"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."