Global energy company,
Royal Dutch Shell plc
) has received the necessary approval from federal officials to
perform limited site work in the Beaufort Sea, in order to set up
its second drill site off Alaska's northern coast.
Earlier, The Bureau of Safety and Environmental Enforcement had
given its nod for similar activities in the neighboring Chukchi Sea
However, Shell cannot move ahead with its drilling plans in the
petroleum zones till the spill response barge is in place. Earlier
this month, the company had postponed its Arctic drilling plans for
a year after a spill containment dome sustained damage during the
course of a testing session.
This year, Shell will drill pilot holes and look into other well
As per federal reports, the U.S. Arctic waters contain an estimated
26 billion barrels of oil and 130 trillion cubic feet of natural
gas. Shell expects to tap this huge resource.
Royal Dutch Shell plc owns one of the largest integrated oil and
gas businesses in the world. The group has operations all over the
world and is involved in various activities related to oil and
natural gas, chemicals, power generation, renewable energy
resources, and other energy related businesses. Royal Dutch Shell
divides its operations into three major segments: Upstream,
Downstream, and Corporate.
We believe that Shell's strong and diversified portfolio of
development projects offer lucrative long-term opportunities to the
company and will continue to boost revenue and earnings growth over
the next few quarters.
However, the company is particularly susceptible to its high
exposure to the downstream business, its major natural gas focus,
as well as lofty capital spending, which may result in reduced
returns going forward.
Royal Dutch Shell - Europe's most valued oil company, ahead of
) currently retains a Zacks #3 Rank that translates into a
short-term Hold rating. We are also maintaining our long-term
Neutral recommendation on the stock.
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