Oil giant Shell has announced it will end its multibillion-dollar Arctic drilling program. The announcement comes after Shell’s exploratory well in the Chukchi Sea showed only traces of oil and gas. This summer, the Obama administration approved Shell’s permit to drill in the remote Arctic waters, despite fierce opposition from environmental groups.

Marvin Odum, director of Shell Upstream Americas, said in a statement: “Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the US. However, this is a clearly disappointing exploration outcome for this part of the basin.”

“Shell will now cease further exploration activity in offshore Alaska for the foreseeable future. This decision reflects both the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska.”

The decision ends a yearslong venture that once was considered full of promise but was questioned by investors, environmental groups and religious and political figures. Shell had viewed the Arctic—one of the few remaining unexplored oil frontiers—as a prize too great to walk away from, despite the recent plunge in oil prices and an unsuccessful effort in the region three years ago that ended with one of its rigs running aground.

The company changed its mind after the well it drilled in the Chukchi Sea this summer—an area Shell had identified as particularly promising—showed only traces of oil and gas. Oil companies have looked longingly at the Arctic for years, but its often icebound seas and treacherous weather make exploring expensive and dangerous. Shell’s decision could spell the end of Arctic drilling for some time, although low oil prices and geopolitics—not environmental concerns—are the main reason.

Shell obtained its licenses to explore the Chukchi Sea in 2008 and pushed ahead with the project when oil prices were at the historical high of more than $100 a barrel. The portion of that sea where it was exploring this summer could hold the equivalent of 29 billion barrels of oil and gas, according to the U.S. Bureau of Ocean Energy Management, though Shell was drilling in only a small area of that region.

Shell had hoped that its best prospect, a drilling area called Burger-J, would prove the region’s huge potential. Instead, the field became one of the industry’s most expensive dry holes. Shell put the balance-sheet value of its offshore Alaska holdings at $3 billion, with a further $1.1 billion of future contractual commitments. That could translate into big write-downs when the company reports its third-quarter earnings, due Oct. 29.

It is expected to repurpose some of the contracts for rigs and ships it has already paid for to other projects to help mitigate the financial impact, but the blow could be significant. Shell’s net profit in the second quarter this year was $3.4 billion.