The pressure is mounting on Shell to abandon its quest for Arctic oil after the US government ordered two reviews into the company's activities off the Alaskan coast that could halt its planned drilling campaign.
The Obama administration has ordered a sweeping review of Shell's plans to drill in the Arctic after a series of accidents in the area involving its ships, rigs and equipment that culminated in the grounding of the rig Kulluk near an Alaskan island on New Year's Eve.
The mishaps have added to the scrutiny Shell was already under as the first oil company into a region where conditions are especially tough and a major spill could inflict huge environmental damage. They have confirmed the fears of some opponents of Arctic drilling that Shell does not have the skill, experience or equipment to cope with the harsh environment.
Tommy Beaudreau, who is leading the review by the US Department of the Interior, said: "We will assess Shell's performance in the Arctic's challenging environment and its ability to meet the strict standards in place for Arctic development."
The Interior Secretary, Ken Salazar, said: "The unique challenges posed by the Arctic environment demand an even higher level of scrutiny."
The 60-day review threatens Shell's ability to secure the permits it needs in time for this year's drilling season – which runs from July to October when the sea ice has subsided – and could force it to scale back or even halt its programme to open Alaska's Arctic waters to oil exploration. Shell publicly welcomed the review, saying it would "help strengthen our Alaska exploration programme".
Shell has already received some approvals for an Arctic exploration programme lasting several years, but it still needs additional permits to penetrate "oil-bearing" rocks and has only drilled shallow wells so far.
The US Coastguard also opened an investigation into the grounding of the Kulluk, which could lead to civil or criminal penalties for Shell or its staff.