Royal Dutch Shell (IW 1000/1) on Monday said it was delaying until next year exploratory drilling for oil in offshore Alaska after suffering damage to a dome used to contain any potential spills.
"The time required to repair the dome, along with steps we have taken to protect local whaling operations and to ensure the safety of operations from ice floe movement, have led us to revise our plans for the 2012-2013 exploration program," the Anglo-Dutch group said in a statement.
"In order to lay a strong foundation for operations in 2013, we will forgo drilling into hydrocarbon zones this year," it added.
Shell's search for oil in the region is facing deep opposition from environmentalists, who worry that an oil spill could have devastating effects on the pristine Arctic environment.
Shell said in its statement on Monday that "during a final test, the containment dome aboard the Arctic Challenger barge was damaged."
It added: "It is clear that some days will be required to repair and fully assess dome readiness.
"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."
Greenpeace: 'Reckless Gamble'
Meanwhile Ben Ayliffe, senior Arctic campaigner at Greenpeace International, said Shell's announcement showed what "a monumentally reckless gamble" the company had undertaken.
"Shell has invested seven years of effort and spent the best part of $5 billion on its Arctic program, but we can now see what a monumentally reckless gamble this was," Ayliffe said in a statement.
"The company has nothing to show for it except a series of almost farcical safety mishaps that has left its reputation in tatters. City investors must now be asking whether investing such vast sums of money trying to exploit the fragile Arctic is really worth it."
Shell insisted that its "exploration program remains critically important to America's energy needs, to the economy and jobs in Alaska, and to Shell."
Copyright Agence France-Presse, 2012