Shell is committed to drilling for oil in Alaska in what it says is the world’s largest unexplored liquid resource base, despite opposition from environmentalists and a pledge to reduce spending.
Alaska “is a key resource for energy security” in the U.S., Shell CFO Simon Henry said at a press briefing Thursday. The value is “undoubtedly there,” especially in the acreage the company holds, he said.
Shell in October asked the U.S. for five more years to explore for oil off Alaska, saying setbacks and legal delays may push the start of drilling past the 2017 exploration of some licenses.
The company, which has spent eight years and $6 billion to search for oil in the Arctic’s Beaufort and Chukchi seas, said in a letter to the Interior Department that “prudent” exploration before leases expire is “severely challenged.”
Shell’s plans to produce oil in the region were set back in late 2012 by mishaps involving a drilling rig and spill-containment system, forcing the company to halt operations to repair equipment. It also was sued by environmental groups seeking to block its Arctic plans.
Shell is aiming to start drilling this year, Henry said.
“The acreage in our possession today is the best of the best,” he said. “We drilled this 25 years ago, so we know what’s there. It’s not that difficult to drill; what’s difficult is the logistics around it.”
The U.S. estimates 23 Bbbl of recoverable oil may lie off Alaska’s northern coast, though environmental groups say drilling in harsh Arctic conditions can’t be done safely as the typical Arctic drilling season is no longer than three or four months.
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