Royal Dutch Shell’s new chief executive said Thursday the company is shelving its Alaska exploration program, at least for this year.
An appeals court ruling that faulted federal regulators’ environmental analysis of Chukchi Sea oil development has created “substantial obstacles” to Shell’s plan to drill exploration wells this year in that remote region off northwestern Alaska, the company said in a statement.
“This is a disappointing outcome, but the lack of a clear path forward means that I am not prepared to commit further resources for drilling in Alaska in 2014,” Shell’s new CEO, Ben van Beurden, said in the statement. “We will look to relevant agencies and the court to resolve their open legal issues as quickly as possible.”
Suspension of Alaska exploration was described by Shell as part of a strategy to cut costs and focus on improved return on investments. The company said it plans to reduce capital spending in 2014 to $37 billion from the $46 billion spent in 2013. The company also said it will “increase the pace” of its asset sales, expected to total $15 billion in 2014 and 2015. Shell also suspended drilling in Alaska’s Arctic in 2013, not long after a series of mishaps with its drill rig Kulluk…