Shell Withdraws Alaska Well Project Amid Opposition

By Fred Pals

May 8 (Bloomberg) -- Royal Dutch Shell Plc, Europe’s largest oil company, has formally withdrawn a three-year plan for exploration in Alaska’s Beaufort Sea because of environmental issues.

“The 2007-2009 plan of exploration no longer represents Shell’s current drilling objectives,” The Hague-based Shell said in an e-mailed statement today. “Additionally, Shell will file a 2010 plan of exploration that reflects Shell’s current drilling plans for Camden Bay,” the company added in the statement.

Environmental groups and local villagers claimed that drilling in the Beaufort Sea might harm the whales and fish that Inupiat native Alaskans depend on. The U.S. Court of Appeals in San Francisco in November threw out the Interior Department’s approval of the project. The U.S. Court of Appeals in Washington said last month that plans to allow drilling in the current program were approved without adequate review of the effects.

Shell, which re-entered Alaska in 2005 after it abandoned the area in 1998, has said it invested $200 million in the project to drill wells in the sea. The U.S. Minerals Management Service in July 2005 awarded Shell 84 leases in the Beaufort Sea.

To contact the reporter on this story: Fred Pals at fpals@bloomberg.net