Shell is pressured to stop Arctic oil search

Pressure is mounting on Shell to abandon its quest for oil in the Arctic Circle after the US government ordered two reviews into the Anglo-Dutch company's activities off the Alaskan coast, which could halt its planned drilling campaign.

The Obama administration has ordered a sweeping review of Shell's plans to explore in the Arctic after a series of accidents involving its ships, rigs and equipment, culminating in the grounding of the Kulluk rig near an Alaskan island on New Year's Eve.

The mishaps have added to the scrutiny Shell was already under. Conditions are especially tough in the region, 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 ability to meet the strict standards in place for Arctic development."

The 60-day review threatens Shell's ability to secure permits it needs for this year's drilling season – July to October – 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".

Although Shell has received some approvals for an Arctic exploration programme stretching over several years, it needs additional permits to penetrate "oil-bearing" rocks. The US Coastguard has opened an investigation into the grounding of the Kulluk.