Shell share price: Oil giant to resume Arctic drilling
Royal Dutch Shell Plc (LON:RDSA) is expected to restart its oil drilling activity in the Arctic in the near future, amid speculation that the US government will give the Anglo-Dutch company the green light to proceed. The controversial decision is sure to raise ire from environmentalists who have campaigned against proposed exploration by Shell in the seas off Alaska.
Sally Jewel, the interior secretary for the US government, is expected to give the go-ahead as soon as Wednesday. The approval would come despite last year’s US federal court ruling that forced the US Interior Department to rethink its decision-making process, after environmentalists claimed that the government had made mistakes in assessing the environmental risks in the drilling program. However, even though information from the Bureau of Ocean Energy Management (BOEM) states there is a 75 percent chance of an oil spill occurring in this area, the company has backed the decision to allow the drilling.
Greenpeace believes that drilling in extreme Arctic conditions is always risky, especially when companies are trying to reduce costs due to oil prices plunging to $50 per barrel. “Piling cost-cutting pressures onto these contractors, who already have frankly atrocious safety records, doesn’t bode well for the Arctic,“ said Charlie Kronick, Greenpeace’s Arctic campaigner.
Shell, on the other hand is eager to restart the Arctic drilling, with chief executive Ben van Beurden stating that the company has “retained very significant capability” to be able to continue with its Alaskan exploration.
When questioned on the safety of drilling and the effects it has on the environment, a spokesman for the company said that plans to explore the area had to meet its own safety standards as well as those of the US regulators.
The move to restart drilling comes after Shell suffered a setback in its $5 billion Alaskan exploration program which was set to start in the summer of 2014. The suspension of activity followed a troubled 2012, when Shell’s drilling campaign was offset by a myriad of technical failures forcing them to leave the area.
As of 12:26 GMT, Monday, 23 March, Royal Dutch Shell Plc ‘A’ share price is 2,100.50p.