Shell Backs Out of Alaska Off-Shore Exploration

Discussion in 'Environmental' started by xcel, Oct 5, 2015.

  1. xcel

    xcel PZEV, there's nothing like it :) Staff Member

    Shells Burger J well is approximately 150 miles from Barrow, AK in Alaska’s Chukchi Sea in about 150 feet of water. Shell safely drilled the well to a total depth of 6800 feet this summer in a basin that demonstrates many of the key attributes of a major petroleum basin. For an area equivalent to half the size of the Gulf of Mexico, this basin remains substantially under-explored.

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

    Marvin Odum, Director, Shell Upstream Americas:
    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.

    The company expects to take financial charges as a result of this announcement. The balance sheet carrying value of Shell's Alaska position is approximately $3.0 billion, with approximately a further $1.1 billion of future contractual commitments. An update will be provided with the third quarter 2015 results.

    Shell holds a 100% working interest in 275 Outer Continental Shelf blocks in the Chukchi Sea.

    Operations will continue to safely de-mobilize people and equipment from the Chukchi Sea.
     
  2. brick

    brick Answers to "that guy."

    Part of me wonders if they aren't simply saving this resource for such a time that oil prices return to their prior highs. Why bother with an offshore field in the middle of nowhere while crude is trading below $50/bbl with clouds looming over the global economy? If China is really slowing-down then you've just lost any impetus for demand to increase and thus drive up prices. I bet Shell doesn't have to look beyond a 12 month horizon, anyway.
     
  3. worthywads

    worthywads Don't Feel Like Satan, I am to AAA

    ^ +1 No reason to drill soon.
     
  4. phoebeisis

    phoebeisis Well-Known Member

    Right-$40 oil-why bother
     

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