Shell delays Arctic drilling plans for a year

Shell last night announced it had shelved its controversial Arctic drilling plans after a series of failures in the quest for fresh oil supplies.

The energy giant said it would halt exploration activity for 12 months in Alaska's Beaufort and Chukchi seas to "prepare equipment and plans for a resumption of activity at a later stage".

The company's £3bn campaign to discover oil was last year subject to a review by the US Interior Department, which said its findings would influence future decisions to issue permits to drill in the region. One of Shell's two drilling rigs, the Kulluk, was damaged after strong weather conditions. Environmental campaigners celebrated the announcement. "Shell's multi-billion dollar Arctic investment lies in tatters, and so does the company's reputation," said John Sauven, the executive director of Greenpeace.

He added: "They were warned that they'd underestimated the huge challenges posed by drilling off Alaska, but they pushed on regardless, determined to spark a new Arctic oil rush."

"We've made progress in Alaska but this is a long-term programme that we are pursuing in a safe and measured way," said Marvin Odum, director of Upstream Americas, Shell's exploration arm.