Shell sees potential in U.S. Arctic

ANCHORAGE (Reuters) – Royal Dutch Shell Plc is looking for oil and gas in the Chukchi and Beaufort Seas off the coast of Alaska, but the finds will have to be significant to justify the huge cost of development, a senior Shell executive said Friday.

Shell surprised many in the oil industry when it bid $2.1 billion for acreage in this month’s controversial auction of drilling rights in the Chukchi Sea, a large polar bear habitat, and one of the least explored areas in U.S. federal waters.


However, after conducting two years of seismic surveys in the Chukchi ahead of its bid, Shell is confident the area is one of the most promising exploratory basins in its portfolio.

“We’ve picked up licenses and blocks based on those surveys, and we’ve been confident to put that kind of money there,” Annell Bay, vice president of exploration for the Americas at Shell, said in an interview.

The U.S. Minerals Management Service, which regulates oil and gas activities in federal waters, thinks 15 billion barrels of oil and 75 trillion cubic feet of natural gas can be found in the Chukchi Sea.

Reuters