Shell share price: Wildlife protection laws deter group’s Arctic drilling plans
Royal Dutch Shell’s (LON:RDSA) Arctic oil exploration plans have been dealt a blow by the Obama administration, which has ruled that animal protection laws bar the company from drilling with two rigs simultaneously unless they meet specific requirements.
The issue is with the Fish and Wildlife Service’s protective buffer zone stipulations, which are aimed at preventing sound from drilling disturbing the populations of walruses, polar bears and other marine mammals in the Chukchi Sea area. While the agency does permit drilling in the region, a buffer zone of 15 miles must be maintained between any two simultaneously operated drilling projects. With a planned buffer of only 9 miles, none of Shells intended well locations currently meet the agency’s criteria as they stand.
The restriction will slash the amount of work Shell had hoped to accomplish. The London-listed group is evaluating the situation and “will continue to pursue” its drilling plan, spokesman Curtis Smith said following the decision. “Our goal is to safely accomplish as much work as we can before the end of open water season.”
The development came the same day that Shell sent the Noble Discoverer, the second of two drilling rigs, to Alaska from the Seattle area. Drilling is expected to take place from late July until late September. The company is returning to Artic exploration for the first time since its mishap-plagued 2012 season.
The US Interior Department said that Shell could still drill this summer, if it gets a few more permits required under a conditional plan the administration approved in May. The oil industry, environmentalists and federal regulators are closely watching Shell’s Arctic program, which represents the first offshore oil exploration in the region in decades. A significant discovery could spark new industry interest in the area. The potential of the region is thought to rival that of the Gulf of Mexico.
Shell’s share price opened in positive territory this morning. By 08:26 BT, the stock had gained 0.62 percent to stand at 1,797.50p.
As of 09:21 BST, Wednesday, 01 July, Royal Dutch Shell Plc ‘A’ share price is 1,800.25p.