Shell Arctic Oil Drilling Delayed

Tuesday, July 10, 2012 @ 04:07 PM gHale


Royal Dutch Shell wants to drill off Alaska’s north coast, but it won’t happen until at least August as the company waits for ice to clear and modifies a spill-response vessel to meet U.S. Coast Guard requirements.

“Our largest impediment to time of drilling is persistent sea ice,” said Curtis Smith, a Shell spokesman. “We’ve moved our estimation from late July to potentially the first week of August.”

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The Hague, Netherlands-based company will use the delay to complete renovating a barge called the Arctic Challenger to add oil-recovery equipment they can deploy in the event of a well blowout.

The company, which has spent almost $5 billion in Alaska, plans to drill as many as five wells this year. Environmental groups and native Alaskans have slowed Shell’s plans to tap resources in the Chukchi and Beaufort seas, estimated to have more than 20 billion barrels of oil. The groups that oppose drilling cite the risks of an oil spill and air pollution.

The Coast Guard said the barge has deficiencies in firefighting and electrical systems that Shell must correct before getting a permit. The company plans to comply with the requirements, said John Haney, Shell project development and construction manager.

Shell is seeking to classify the barge as a mobile platform, rather than as a vessel anchored in one place and unable to clear out in case of storms. The change would better match the type of operations intended for the barge, he said.

A fleet of vessels, led by the Kulluk and Noble Discoverer, departed Seattle en route to Dutch Harbor, Alaska, last month in preparation for the exploratory work, Shell said in a June 27 statement. The barge, operated by Superior Energy Services Inc. (SPN), remains in a shipyard in Bellingham, WA, the Coast Guard said.

Besides the Coast Guard certificate, Shell has to obtain a final permit from the Interior Department’s Bureau of Safety and Environmental Enforcement.



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