Royal Dutch Shell will halt its exploration program for the U.S. state of Alaska in 2014, new CEO Ben van Beurden announced Thursday.
He said the plans to cease activities in Alaska and lower Shell's total capital spending from $46 billion in 2013 to $37 billion this year are part of a series of steps aimed at reversing a loss of "momentum" by the European oil supermajor, whose fourth-quarter profits plunged 71 percent relative to the same period of 2013.
The company also plans to sell $15 billion in assets in the 2014-15 fiscal year in its Upstream and Downstream divisions, Van Buerden, who took over as chief executive officer at the start of the year, said.
"We are making hard choices in our worldwide portfolio to improve Shell's capital efficiency," the CEO added.
The decision to halt oil prospecting in Alaska was made after a U.S. federal court ruled last week that the U.S. government underestimated the environmental risks of Arctic drilling when opening that area to exploration.
"This is a disappointing outcome, but the lack of a clear path forward means that I am not prepared to commit further resources for drilling in Alaska in 2014," Van Buerden said.
Greenpeace Arctic activist Charlie Kronick, meanwhile, told British daily The Guardian that "Shell's Arctic failure is being watched closely by other oil companies, who must now conclude that this region is too remote, too hostile and too iconic to be worth exploring." EFE