AKIPRESS.COM - Royal Dutch Shell said Monday that it would stop exploration off the coast of Alaska “for the foreseeable future.”

The decision came after the Burger J well, which the company drilled this summer, produced disappointing results. The company said the well had “found indications of oil and gas, but these are not sufficient to warrant further exploration” of the Burger prospect, a geological structure, NYTimes reports.

Shell said that the decision reflected not only the disappointing results from the well but “the high costs associated with the project and the challenging and unpredictable federal regulatory environment in offshore Alaska.”

Rusting ship hulls lying in Teriberka, a village of 1,000 people on the Barents Sea, where Gazprom’s offshore ambitions collided with the harsh realities of the Arctic.

In 2015, Obama administration gave the green light for the company to resume its efforts. Investors and industry executives questioned the wisdom of Shell’s spending heavily and putting its reputation at risk — especially with oil prices having fallen over the past two years from $110 per barrel to below $50 per barrel.

Stopping drilling in offshore Alaska is a major disappointment for Shell, whose executives thought they had locked up a potentially huge trove of oil there. In July, Ben van Beurden, Shell’s chief executive, said that the area where the company was drilling in the Chukchi Sea, 150 miles offshore, “has the potential to be multiple times larger than the largest prospects in the U.S. Gulf of Mexico.”

The Alaska operations have cost billions of dollars. Shell said the value of Alaska drilling on its balance sheet was $3.1 billion and that it had a further $1.1 billion in contractual commitments, probably for items like drilling rigs. The company said it would take write-offs as a result of the decision to halt drilling.

“Shell continues to see important exploration potential” in offshore Alaska, Marvin E. Odum, the company’s head of exploration and production, said in a statement. “However, this is clearly a disappointing outcome.”

In a note to investors, Biraj Borkhataria, an analyst at RBC Capital Markets in London, said that investors were disappointed by the well results but might welcome the decision to suspend drilling in the long run.

“We think the budget for exploration drilling would be better spent elsewhere,” he wrote.