Houston: Oil giant Royal Dutch Shell has halted plans to drill for oil off Alaska this year as a containment dome to cap any spills has been damaged, the company said Monday.
The time needed to repair the dome means Shell will not have enough time to drill deep enough to find oil this year, the company said in a statement.
"We are disappointed that the dome has not yet met our stringent acceptance standards, but as we have said all along, we will not conduct any operation until we are satisfied that we are fully prepared to do it safely," the statement said.
In a statement, Shell, which has spent more than USD 4.5 billion over four years preparing for work in the Chukchi and Beaufort seas, reminded investors of the importance of its Arctic drilling programme to the US economy.
"This exploration programme remains critically important to America's energy needs, to the economy and jobs in Alaska, and to Shell," the company said.
The long-planned drilling programme in the Chukchi Sea, 70 miles off Alaska's north-west coast, has been dogged with last-minute hiccups as the company has raced to get drilling underway before the winter sets in.
Some drilling started this month but was halted within days after it emerged that a ice floe 30 miles long and 12 miles wide appeared to be heading toward the drill ship.
Progress was further hampered by efforts taken to protect local whaling operations.
Shell still awaits a full drilling permit for its exploration programme in the area and the paperwork is dependent on successful testing of its Arctic containment system, which includes the dome.
"We look forward to the final receipt of our drilling permits for the multi-year exploration program upon the successful testing and deployment of the Arctic containment system," the company said.
Environmental campaigners have repeatedly warned about the high risks involved in Arctic drilling as well as the potentially catastrophic consequences of a spill similar to Deepwater Horizon in a region already badly impacted by climate change.