This article is 11 years old. Images might not display.
The $US2.6 billion ($A2.8 billion) lease deal attracted Shell as a major player among the likes of ConocoPhillips and Statoil, spending $US2.1 billion before the deal was deemed invalid in 2010.
The lawsuit against the lease sale was brought by a coalition of Alaskan Native and conservation groups including the National Audubon Society, Alaska Wilderness League and the Inupiat Community of the Arctic Slope.
It was found that BOEM improperly relied on an estimate of 1 billion barrels of recoverable oil from a hypothetical first production project when it considered potential spills and blow-outs.
The estimate was drawn from remedial environmental analysis ordered in 2010 by Beistline, after deficiencies were found in pre-sales environmental studies done by BOEM's predecessor, the Minerals Management Service.
BOEM will be allowed to review Shell's latest Chukchi exploration plan, which it submitted late last year, in conjunction with its studies into the environmental impacts through a supplemental environmental impact statement.
Alaska's US senator Mark Begich, who has long fought for oil and gas development in Alaska, welcomed Beistline's decision.
"This is good news for Alaskans and for our state's economy because it ends the temporary shutdown of Shell's development plans and should lead to resumption of oil and gas development in our state's promising offshore," he said in a statement.
"This lawsuit was just another delaying tactic by those who oppose responsible development in Alaska, so Alaskans should be relieved that we're now getting on with the business we know how to do so well."
BOEM's EIS will follow the one it drafted in 2011 to address Beistline's initial concerns, which led to the lifting of the suspension of drilling activities or permits allowing drilling in Chukchi.
Shell conducted a 2012 drilling season in the Chukchi and Beaufort seas, but ran into a raft of problems, ultimately ending with the grounding of its Kulluk drill ship in the Gulf of Alaska during a storm.
The company shelved plans to drill in the Arctic in 2013.
Under Beistline's new order, BOEM may authorise "ancillary activities" in the Chukchi, allowing seismic tests, marine surveys and other pre-drilling work, however there are no pending applications for such work.
