An Arctic drilling operation has been suspended on board a Shell oil exploration ship which Greenpeace activists boarded during a protest off the coast of Taranaki in February.
Shell announced on Monday night (NZT) that it was suspending oil exploration in the Arctic until at least next year after a massive dome, used to cap a potential oil spill, was damaged, according to media reports.
Instead the Noble Discoverer and another rig, the Kulluk, will drill "top holes" which will be capped and left in preparation for drilling into oil-bearing rocks next year.
"Shell's farcical drilling season shows why they should not be in the Arctic," Greenpeace NZ senior climate campaigner Simon Boxer said.
"If they had got to the point at which there was a real oil blowout, they would have failed entirely in capping it."
Marvin Odum, president of Shell's US operations, told the Financial Times that the setback was disappointing but it did not change Shell's view of its Arctic mission.
Shell's Arctic programme, reportedly costing the firm $4.5 billion, has had a string of setbacks since it was given the go-ahead in July.
The US Coast Guard raised concerns earlier this year about whether the Arctic Challenger, Shell's oil spill containment vessel which carries the newly-damaged dome, was seaworthy.
In July the Noble Discoverer slipped its mooring and drifted toward shore in Alaska's Dutch Harbour.
After drilling began last month Shell had to suspend operations and move its rig to avoid encroaching sea ice.
In June, actress Lucy Lawless and seven other Greenpeace activists admitted a charge of being unlawfully on a ship after they spent 77 hours on a 53m-high tower they scaled aboard the Noble Discoverer at Port Taranaki in February.
The action was aimed at protesting Shell's planned exploration for oil in the Arctic.
The group is due to be sentenced in court in November.