Royal Dutch Shell said Monday it is halting its oil drilling operations in the Arctic waters off the coast of the U.S. state of Alaska "for the foreseeable future."
A company statement said an exploratory well found "indications of oil and gas" in the Chukchi Sea about 240 kilometers from the town of Barrow, but not enough to continue operations. It cited high costs and the "unpredictable federal regulatory environment" among reasons for deciding to seal the 2,000-meter well.
"Shell continues to see important exploration in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the U.S.," Shell Upstream Americas Director Marvin Odum said. "However, this is a clearly disappointing exploration outcome for this part of the basin."
The Arctic region is estimated to hold 20 percent of the world's untapped oil and gas.
The U.S. government granted Shell permission to drill in August, a move that drew sharp criticism from environmental groups.
Greenpeace called Monday's announcement "a defining day for the Arctic" and a victory for those who oppose drilling there.
"It's time to make the Arctic Ocean off limits to all oil companies," Greenpeace International Executive Director Kumi Naidoo said. "This may be the best chance we get to create permanent protection for the Arctic and make the switch to renewable energy instead."