WASHINGTON — Shell is abandoning hopes of drilling in the Arctic waters off Alaska this year, the latest blow to the company’s effort to exploit huge potential in the petroleum-rich but ecologically sensitive region.
The decision came as Shell reported a steep drop in earnings last week and its new CEO announced plans to restructure operations to improve the company’s cash flow.
CEO Ben van Beurden cited last month’s court ruling that threw offshore Arctic oil leases into question. The 9th U.S. Circuit Court of Appeals agreed with environmental and Alaska Native groups that the federal government had underestimated how much oil drilling would happen when it sold the leases in 2008.
Van Beurden told investors that the ruling raised “substantial obstacles” for Shell’s plans in Alaska waters.