Shell Offshore Inc., a wholly owned subsidiary of Royal Dutch Shell plc (RDS.A), received conditional approval from U.S. Bureau of Ocean and Energy Management and Regulatory Enforcement (BOEMRE) to conduct exploration activities in the Beaufort Sea.
However, Shell is also required to obtain all other necessary permits from the U.S. Environmental Protection Agency, U.S. Fish and Wildlife Service, National Marine Fisheries Service, and other bodies.
The Anglo-Dutch energy giant plans to drill up to four shallow-water wells in the Camden Bay, offshore Alaska, beginning July 2012. Shell bought the leases in 2005 and 2007, for approximately $3.5 billion.
Shell’s pursuit to secure drilling rights in the Alaskan waters highlights its efforts to tap the vast oil and gas resources under the Arctic Ocean and look beyond the customary U.S. offshore drilling arena –– the Gulf of Mexico.
The Hague-based Royal Dutch Shell owns one of the largest integrated oil and gas businesses in the world. The group has operations worldwide and is involved in various activities related to oil and natural gas, chemicals, power generation, renewable energy resources, and other energy related businesses.
We believe that Shell’s strong and diversified portfolio of global energy businesses offer attractive long-term growth opportunities. The group’s strong inventory of development projects and increased capital expenditures will support volume growth in the long run.
However, Shell’s operations remain directly exposed to oil and gas prices, which are inherently volatile and subject to complex market forces. Moreover, the company’s relatively heavy downstream exposure leaves it less diversified than its integrated peers such as BP Plc (BP) and Exxon Mobil Corporation (XOM). We are maintaining our long-term Neutral recommendation on the stock.
BP PLC (BP): Free Stock Analysis Report
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
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