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The Interior Department wrote in a statement that Shell could begin drilling in the Chukchi Sea once several environmental conditions are met, including a sign-off from agencies assessing the impact on endangered species. State agencies must also approve the plan.

The move has upset environmental activists who are concerned the drilling will have detrimental effects.

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Shell, if it obtains the remaining permits, would be the only company drilling in the federal waters in the Arctic.

Abigail Ross Hopper, the director of the Interior Department's Bureau of Ocean Energy Management, said her agency had taken "a thoughtful approach" to Shell's requests for drilling permits in the Arctic.

"As we move forward, any offshore exploratory activities will continue to be subject to rigorous safety standards," she said.

Shell has been pressing for years to gain permission from the federal government to tap Arctic Ocean oil reserves, a move environmentalists have protested for the perceived risks to the environment and wildlife.

The Interior Department estimates there to be more than 20 billion barrels of oil and 90 trillion cubic feet of natural gas beneath the freezing Arctic waters near Alaska.

Tim Donaghy, a senior research specialist for Greenpeace, panned Monday's decision.

"Instead of holding Shell accountable and moving the country towards a sustainable future, our federal regulators are catering to an ill-prepared company in a region that does not tolerate cutting corners," he said.

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Obama administration approves drilling in Arctic ...