Shell Freezes Beaufort Exploration Program Offshore Alaska

Reuters reported Wednesday that Shell has formally shelved its 2007-2009 exploration plan in Alaska's Beaufort Sea due to environmental litigation blockades, but will commence exploration drilling in the state's Chukchi Sea in 2010.

The report noted that Shell intends to file scaled-back exploration plans for 2010 to the U.S. Minerals Management Service. The oil major had an initial three-year plan to drill nearly a dozen wells at the Sivulliq prospect in the Beaufort Sea in 2007 with completed operation slated for this year, according to Reuters.

However, Shell decided to nix the program after the 9th Circuit Court of Appeals ruled in November that the MMS did not consider the environmental consequences when issuing Shell a drilling permit and thus overturned the federal officials' approval of the exploration program.

Shell's new approach to drilling offshore Alaska in the Beaufort Sea is lackluster in the face of lawsuits challenging the oil major's environmental impact. Officials from Shell reported that the revised plan will span one year in which the company will utilize a single drilling rig instead of two and will drill two wells instead of four, the report said.

"Over the last three years, Shell's Beaufort Sea drilling objectives have become more focused with the acquisition and analysis of additional seismic data," said Pete Slaiby, Shell Alaska's general manager. "As a result, the 2007-2009 plan no longer represents Shell's current drilling approach."