Shell Oil’s Exit of the Chukchi Sea in the Arctic Circle


Wow- what just happened?     Shell Oil made 7 billion dollar investment in the Arctic Circle, drilled one well in 4 months, and poof,  then this week they announced   they didn’t find enough oil to justify further exploratory drilling.

With last week’s announcement,  Greenpeace can claim victory, I guess.   Well, if they want to.  Perhaps they were better off with the war against Shell.  I mean perhaps the average American can’t locate the Chukchi Sea,  but Shell gas stations are another story.

But,  let’s go back to the well and  Chukchi Sea.  It is above the Bering Straits, between Russia and Alaska.

Shell’s Burger J exploratory well is located 80 miles from the coast of Alaska.   This well was drilled strictly an exploratory well.   After drilling and logging the perspective hydrocarbon zones,  the well would be plugged and abandon.   The well was drilled to a depth of 6800 ft, encountered some hydrocarbon shows, and then plugged with cement.   This would all be done in accordance to the approved well plan.

It is impossible to produce oil except as test lasting a few days, without facilities.

So, how much oil is there in Chukchi?   When no well has yet to confirm a commercial discovery,  the reserves (proved oil) of the Chukchi sea are zero. But how much oil might there be- is an entirely different question.    The resources  value could be as much as 30 billion barrels.  See:

And also as low as zero.  Of course, Shell would likely have been happy with one billion barrels in recoverable oil,  if it was a light oil that could be produced at high rates.

Shell was the largest leaseholder, so it will be hard for smaller companies to take similar risks.

The world is full of oil that will never be tapped, and it is a fact of life in the oil industry. There were billions of barrels of “resources” along the Eastern Atlantic coastline until a few exploratory wells  reduced these speculative estimates to zero.

Many  deposits are too small, or too remote, geologically too complex  and with environmental risks too great to be worth  being developed.

Stay tuned,

David Lord