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Reuters: Shell ordered to suspend Arctic offshore drilling

Fri Jul 20, 2007 3:44pm ET

By Yereth Rosen

ANCHORAGE, Alaska, July 20 (Reuters) – A U.S. federal appeals court has ordered Royal Dutch Shell Plc (RDSa.L: Quote, Profile , Research) to suspend oil exploration operations in the Beaufort Sea off the north coast of Alaska pending a legal challenge being brought by environmental activists and Alaska native groups.

The ruling deals a serious blow to Shell’s plan to drill up to four exploration wells during the brief Arctic summer to test a $44 million bet the company placed on the region in 2005. Oral arguments in the case are set for Aug. 14.

Shell officials were not immediately available for comment.

Opponents of drilling in the Beaufort Sea argue that environmental impact studies carried out by Shell and approved by the U.S. Department of the Interior failed to take seriously the threat posed to bowhead whales and other wildlife.

Native whalers also are concerned that hunting the whales, which they are permitted to do by the International Whaling Commission, could become more difficult and dangerous.

“The industry and the government have to slow down and listen to the scientists and the concerns of the whalers,” said North Slope Borough Mayor Edward Itta in a statement.

“We stand the chance of losing our whaling crews and the traditional food that feeds our families.”

The Interior Department’s Minerals Management Service approved Shell’s drilling plans in February.

Shell had planned to drill four wells on the Sivulliq prospect this summer. Oil had been discovered at Sivulliq in the 1980s but the field was abandoned at the time due to the high cost of developing oil fields in the Beaufort Sea.

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