Oil major Shell said on Wednesday it has formally withdrawn a three-year plan for energy exploration in Alaska's Beaufort Sea after it was stymied by environmental litigation.
Shell said it informed the U.S. Minerals Management Service that it is shelving its 2007-2009 Beaufort plan and will soon file new exploration plans for 2010 that will be much smaller in scale to address environmental concerns expressed by North Slope residents.
Over the last three years, Shell's Beaufort Sea drilling objectives have become more focused with the acquisition and analysis of additional seismic data, Pete Slaiby, Shell Alaska's general manager, said in a statement. As a result, the 2007-2009 plan no longer represents Shell's current drilling approach.
Shell had originally planned to drill nearly a dozen wells over three years at Sivulliq, a prospect in the Beaufort Sea where oil had been discovered, along with other wells at another Beaufort Sea prospect. The drilling was to have started in 2007 and been completed this year, according to Shell's original plans.
But after a court ruled in November that federal officials failed to address environmental impacts when they granted the company a permit, Shell said it will not pursue the drill program in 2009.
Lawsuits challenging the drilling resulted in the 9th Circuit Court of Appeals order overturning the MMS decision granting permission for that program. The lawsuits, filed by environmentalists, Native groups and the North Slope Borough, said the MMS authorized the drilling without adequately reviewing impacts to whales and other marine life.
Shell's 2010 plan for exploring the Beaufort Sea will be much reduced from the earlier proposed program, company officials said. It will span one year instead of three, use a single drilling rig instead of two and seek to drill two wells instead of four, officials said.
Shell officials have also said they plan to start exploration drilling in Alaska's Chukchi Sea next year.
(Editing by Marguerita Choy)