Shell has received conditional approval from the US Government's Minerals Management Service (MMS) to explore two leases in the Beaufort Sea, Alaska.
The leases are located 16 and 23 miles north of Point Thompson, Alaska, where Shell plans to drill two exploration wells during the open water drilling season in July-October 2010.
Drilling will be carried out using the M/V Frontier Discoverer, a drill ship retrofitted and ice reinforced for arctic OCS waters.
Shell's proposal involves a mid-drilling season break in work and removal of the drill ship to allow Kaktovik and Nuiqsut villages to perform fall subsistence bowhead whaling.
The move by the MMS follows calls by environmentalists to ban oil and gas exploration in the region. Local groups have also condemned the decision to allow drilling, saying that it will generate industrial levels of noise in the water, and pollute the air and surrounding water.
But from August next year all operations will be stopped in time for whale hunting in the area. It is expected that operations will restart following the hunts and extend to 31 October 2010, depending on weather and ice conditions.
Shell's licence is confined to the far western region of Camden Bay, including the deployment of one drill ship with one tending ice management vessel, according to the MMS.
Shell must also satisfy the air and water quality regulations laid out by the Environmental Protection Agency and Marine Mammal Protection Act of the US Fish and Wildlife Service and National Marine Fisheries Service.
MMS director Liz Birnbaum said that MMS would continue to work with Shell to ensure that all work is conducted in a safe and environmentally responsible manner.
The Beaufort Sea is estimated to contain 27.64 trillion cubic feet of natural gas and 8.22 billion barrels of oil.