Anchorage Daily News

Shell Oil has canceled its drilling and other exploration plans for next year in the Beaufort Sea while it focuses on court challenges to its offshore plan.

A three-judge panel of the 9th U.S. Circuit Court of Appeals ruled last month that federal regulators improperly granted Shell permission to drill in the Beaufort. The court ordered the Minerals Management Service to reconsider how exploratory drilling would affect wildlife and Inupiat Eskimo subsistence hunting and fishing.

Shell said the agency completely analyzed the exploratory plan and correctly found that it would have minimal impact on marine mammals and subsistence activities.

Shell said Thursday that it now wants the full appeals court to hear the case. The state said it would support Shell's petition.

Phil Dyer, Shell Alaska spokesman, said his company had hoped to invest tens of millions of dollars in the offshore Alaska exploration next year, employing about 700 people directly during the effort.

The original intention was to establish a rig offshore and drill three exploratory wells next year, Dyer said. Instead, the oil company will put together a drilling plan for 2010 and 2011 that will include both the Beaufort and Chukchi seas.

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