Oil Executives Tune Out the Call of the Wild Arctic

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Oil Executives Tune Out the Call of the Wild Arctic

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Oil executives tune out the call of the wild Arctic

Monday, June 3, 2013 - 4:45pm

CAMPAIGN: Law

CONTENT: Article

By Balazs Koranyi 

The high Arctic, once the irresistible frontier for oil and gas exploration, is quickly losing its appeal as energy firms grow fearful of the financial and public relations risk of working in the pristine icy wilderness.

The Arctic may hold 13 percent of the world’s undiscovered oil and 30 percent of its gas, but a series of blunders and failures there are making executives fight shy of such a sensitive area and turn their attention back to more conventional resources and the shale revolution.

The turning point likely came on New Year’s eve, when Royal Dutch Shell’s drillship ran aground in rough waters off Alaska, setting off a public relations storm that inflicted much pain on the firm, made more acute by how little it had to show for the $4.5 billion it has spent on the Arctic since 2005.

Shell promptly cancelled plans to drill off Alaska in 2013, and signals about its going back in 2014 are fading.

“The whole Arctic, especially the American Arctic, was set back because of Shell’s issue,” Choo Chiau Beng, the Chief Executive of Keppel, the world’s biggest rig maker, told Reuters in the world’s northernmost settlement.

The accident caused little damage and no spill, but it was a big lesson for firms looking for Arctic resources.

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Keywords: Energy | arctic | gas exploration | oil | sustainability

CAMPAIGN: Law

CONTENT: Article

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