Disappointed by the results of their Burger J exploratory wells in the Chukchi Sea, Royal Dutch Shell announced that they will not be exploring for oil in Alaska for the “foreseeable future,” they said in a statement.

Shell said on Monday, that they had “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.”

Shell cited “high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska” as their reasons to cease exploratory operations.

Marvin Odum, Director, Shell Upstream Americas, said on Monday, “The Shell Alaska team has operated safely and exceptionally well in every aspect of this year’s exploration program, 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.”

Alaska’s Governor Bill Walker released a statement on Monday, where he said, “I thank the people of Shell for all their hard work on offshore exploration and their strong focus on safety. While the company’s recent announcement is disappointing, it is a reminder that underscores the need for Alaska to drive its own destiny through development of known gas resources, as well as rich oil reserves in a small area of ANWR. I contacted the White House this morning to set up meetings to discuss the potential impact of Shell’s decision, as well as Alaska’s need to explore in the 1002 area.”

Alaska’s senior Senator expressed disappointment at Shell’s decision, and said in a statement, 

In the more than seven years that Shell has held leases in the Chukchi, it has only recently been allowed to complete a single well. What we have here is a case in which a company’s commercial efforts could not overcome a burdensome and often contradictory regulatory environment. The Interior Department has made no effort to extend lease terms, as recommended by the National Petroleum Council. Instead, Interior placed significant limits on this season’s activities, which resulted in a drilling rig sitting idle, and is widely expected to issue additional regulations in the coming weeks that will make it even harder to drill. Add this all up, and it is clear that the federal regulatory environment – uncertain, ever-changing, and continuing to deteriorate – was a significant factor in Shell’s decision.

Junior Senator Dan Sullivan rected, saying, “Shell’s announcement is being cheered by environmental groups, but it’s a very sad day for Alaska and for working Alaskans and Americans across the country. From the beginning, through unprecedented regulatory hurdles and delays, the Obama administration and its environmental allies have created the conditions for Shell to abandon its Arctic drilling program. And they succeeded. Shell spent seven years and $7 billion trying to drill a single well in America’s Arctic, where hundreds of exploratory wells have been successfully drilled. Under such circumstances it would be extremely difficult for any company to move forward.”

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,” said Shell in their press release.

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  Alaska, announcement, chukchi sea, drilling, exploratory, operations, quits, regulations, shell