As summer approaches, Arctic sea ice will start to melt away. That will open up the region for oil and gas exploration. In American waters, Royal Dutch Shell (NYSE: RDS.A) is the only company braving the remote location and unique conditions in the Arctic.
Shell is not new to Alaska – it drilled the state’s first offshore oil field in the Cook Inlet in 1963. The company moved onto the Arctic in the late 1980s, drilling in the Chukchi and Beaufort Seas only to abandon them after a few short years due to their high costs amid a period of low oil prices.
But Shell returned in a big way in the mid-2000s, buying up the rights to a lot of acreage offshore Alaska in 2005 and 2007. After several years of preparation and delays due to regulatory hold ups and sea ice challenges, Shell took the plunge in 2012. The year was plagued by mishaps and false starts. Shell narrowly escaped without a major disaster, after its drill ship ran aground during a rough storm.
After a cooling off period, Shell is back at it again, gearing up for the summer of 2015 to finally get things right.
The Arctic near Alaska is thought to hold nearly 30 billion barrels of oil and over 221 trillion cubic feet of natural gas. Shell snatched acreage in both the Chukchi and Beaufort Sea, spending over $2 billion on Chukchi leases alone. It will limit its drilling focus to the Chukchi for now. The map below shows Shell’s acreage…