Royal Dutch Shell has abandoned its plans to drill offshore Alaska this year because it lacks a crucial environmental permit.

Out of 34 approvals needed to commence drilling, Shell is due to receive only the outstanding air quality permit.

Shell chief executive Peter Voser said that the company hopes to have permission to drill in 2012, reports The Wall Street Journal.

According to the company, the gap in drilling in the Gulf of Mexico since the Deepwater Horizon oil spill has cost it $260m, with productivity going down by 50,000 barrels per day in the region.