TUESDAY 29 SEP 2015 1:31 PM


Shell announced yesterday (28 September) that it would be pulling out of the Alaskan Arctic after a key well yielded disappointing results.

The Anglo-Dutch oil and gas company, which has invested billions of dollars into its Arctic drilling project, has been forced to withdraw. It is unclear how much of an influence environmentalists and public pressure had on this decision.

Despite President Barack Obama allowing permission for Arctic exploration off the coast of Alaska, Hilary Clinton announced last month that she would not be prepared to support the drilling. The current low price of crude oil is likely another significant contributing factor. It is also likely that Shell’s reputation was a key concern as more and more of the public and high-profile spokespeople resisted the company’s decisions to drill in the Arctic.

Marvin Odum, president of Shell USA, says, "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."

With the amount that Shell has already invested in the project, it is clear that its choice to back-out is supported by a dramatic shift in circumstances. Public pressure and continuous negative publicity are no doubt influential factors that made the gamble less worthwhile.


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