The chief executive of Shell has revealed he embarked on a “personal journey” before making the final decision to resume drilling in the Arctic this year.
Ben Van Beurden said he was aware of the risks the company were taking but believed Shell could responsibly explore for hydrocarbons in the Arctic.
His comments to a BBC programme on climate change were made as former BP chief executive Lord Browne – who was also interviewed – warned the company could be taking both reputational and financial risk with the move.
Lord Browne made the comments as Shell announced it had just started preliminary drilling in Alaska’s Chukchi Sea after several setbacks.
Van Beurden told the programme Shell was aware drilling in the Arctic came with an “increased risk profile” due to the fragility of its environment in comparison to others.
He said: “It is also much more unforgiving in terms of climate, weather, etc. It is also, by the way, the particular reservoir that we are going to explore in, one that is – from a technical perspective – relatively easy. So you have to make a judgement: ‘Can I do this in a responsible way?’.
“That is a bit of personal journey that I had to go through as well and many others associated with the project – we believe that we can responsibly explore for hydrocarbons in Alaska.
“Whether that means that we can develop this in a way that makes commercial sense remains to be seen.”
“If you are in our industry there are always significant risks that you have to worry about and therefore you have to have a very, very strong risk management framework, a very, very good risk management culture and an open and transparent dialogue within the company about what are the risks that you take on.
“There is no such thing as a risk-free world, so I cannot eliminate the risk altogether, but I can bring it back to something that I think is appropriate and manageable.”
But Lord Browne told the BBC there were considerable risks in undertaking the move.
He said: “I’m not chairman of Shell. But I think [Arctic drilling] is very expensive and I would always go for hydrocarbons which have less cost and effort involved.
“Some companies will genuinely believe – they may be right – that they can produce oil safely and environmentally securely in extraordinary conditions.
“[But] I’ve never been a great supporter of right-on-the-margin development, partly because of the cost.
“So I think you’ve got to be careful what you do and cost includes your long-term reputation.”
Lord Browne also claimed that during the current oil price market, company boards were unlikely to prioritise a “prisitine Arctic” or a “stable climate” over the search for oil in regions such as the Arctic.
This month environmental campaigners began a month of protests over oil giant Shell’s efforts to drill in the Arctic with a Titanic- themed orchestral performance.