Shell to start drilling for oil in the Arctic

Oil and gas giant Shell is expected to start drilling for oil in the Arctic Ocean off the coast of Alaska within the next two weeks. 

Oil and gas giant Shell is expected to start drilling for oil in the Arctic Ocean within the next two weeks. Thirty ships departed from Dutch Harbor in Alaska on Thursday for the Arctic to support two initial exploratory wells in relatively shallow water of about 40 to 50 metres deep off the Coast of Alaska. They are expected to discover whether these wells have sufficient quantities of oil to justify further exploration by the end of 2016.

Shell have already invested $7 billion in this project and are expected to spend another $1.4 billion by the end of 2016. The US Interior Department gave them the green light to commence exploration in May, and the oil company believes it will obtain the remaining necessary permits within the next two weeks.

Experts believe that over 20% of the world’s undiscovered oil and gas reserves lie in the Arctic Ocean, but environmentalists warn that the environmental hazards of drilling in this ocean are too great. Shell insists that oil can be extracted safely despite the environmental risks and that the oil will be required to meet a burgeoning demand for energy across the world.

The price of oil has slumped by almost half in the last year to $65 a barrel, leading some to question the economic viability of drilling in the Arctic. However, Shell believes that Arctic oil would be competitive in the longer term.