Shell, (RDSA) the oil and gas giants have been granted final permission by the Obama Administration to continue their drilling expedition in the Arctic floor. Although, the US government will monitor Shells work on a regular basis and ensure utmost safety, the planned drilling has not gone down well with environmental campaigners.
The Anglo-Dutch company has been trying to reestablish its brand image following its disastrous drilling season in 2012. The drilling project, located in the Arctic Ocean near Alaska, is massive boost for major oil companies however, many argue if the project is actually necessary when the current oil prices are falling.
Shell has already invested approximately $7bn (£4.5bn) in this project and it is increasingly optimistic that they will discover large amounts of oil in the region. It is thought that 20% of the world’s undiscovered oil and gas resources can be found in the Arctic. Yet, many are criticizing shells drilling decision by claiming that there is a potentially massive amount of damage which can be caused in the untouched area.
Shell believes the project is vital for the future, as the need for energy will only increase in the forthcoming years. Yahoo Finance Senior Columnist Michael Santoli, states that this project will benefit Shell in the long run. He says . “The big oil majors, the multinationals like Royal Dutch Shell, they constantly need to replace their reserves – they actually do not have enough in place in terms of what they’re pumping to replace those maturing fields and wells that are going out of production,”. He conintues “So in a large, big picture way, if the company expects to be in business in ten years, when this might be a producing well, it certainly needs to look for the oil and gas first.”
A Shell Spokesperson has highlighted the extreme caution Shell is taking in its expeditions. “We remain committed to operating in a safe, environmentally responsible manner and look forward to evaluating what could potentially become a national energy resource base,” the spokesperson said.
The news will one of confidence to the current RDSA share holders and will most likely see a continual growth the stocks share prices