Shell: Updates on Alaska exploration

Shell has provided an update on the Burger J exploration well, located in Alaska's Chukchi Sea. The Burger J well is approximately 150 miles from Barrow, Alaska, in about 150 ft of water.

Shell has safely drilled the well to a total depth of 6800 ft. The basin demonstrates many of the key attributes of a major petroleum basin and although Shell has found indications of oil and gas in the Burger J well, these are not sufficient to warrant further exploration in the Burger prospect. The well will be sealed and abandoned in accordance with US regulations. Shell will now cease further exploration activity in offshore Alaska for the foreseeable future.

"The Shell Alaska team has operated safely and exceptionally well in every aspect of this year's exploration program," said Marvin Odum, Director, Shell Upstream Americas. "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."

The company expects to take financial charges as a result of this announcement. The balance sheet carrying value of Shell's Alaska position is approximately US$3.0 billion, with approximately a further US$1.1 billion of future contractual commitments. An update will be provided with the 3Q15 results.

Shell holds a 100% working interest in 275 Outer Continental Shelf blocks in the Chukchi Sea. Operations will continue to safely de-mobilise people and equipment from the Chukchi Sea.

Edited from press release by

Published on 28/09/2015

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