US Offers Conditional Approval To Shell's Chukchi Exploration Plan

WASHINGTON (Dow Jones Newswires), Dec. 16, 2011

U.S regulators have approved Royal Dutch Shell PLC's (RDSA.LN, RDSA, RDSB.LN, RDSB) plans to explore for oil in the Chukchi Sea, marking an important milestone in the company's efforts to jumpstart oil production in the Arctic Ocean.

The Bureau of Ocean Energy Management said Friday it offered conditional approval to the company to drill up to six exploration wells in the Chukchi Sea, which is north of Alaska in the Arctic Ocean. The approval is conditional upon Shell taking measures to mitigate the risks of oil spills and confirming the availability of spill-response equipment.

Shell has also developed plans to drill for oil in the Beaufort Sea. The company wants to launch those projects in 2012.

Environmental groups criticized the approval granted to Shell on Friday. They have asked the Obama administration to block drilling in the Arctic until more is known about the region and until oil companies prove their ability to respond to potential oil spills in the icy conditions of the Arctic.

Before it can begin exploratory drilling, Shell also has to obtain permits from the Environmental Protection Agency.

Shell was not available for immediate comment.

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