Shell Drill Ships Will Miss 2013 Arctic Season
Citing a need to repair equipment, the company is looking to 2014 to resume exploration
Shell Oil announced the company “will pause its exploration drilling activity for 2013 in Alaska’s Beaufort and Chukchi Seas to prepare equipment and plans for a resumption of activity at a later stage.”
“We’ve made progress in Alaska, but this is a long-term program that we are pursuing in a safe and measured way,” said Marvin Odum, Director, Upstream Americas in the press release. “Our decision to pause in 2013 will give us time to ensure the readiness of all our equipment and people following the drilling season in 2012.”
The New York Times (Broder) reported that “The company’s two drill ships suffered serious accidents as they were leaving drilling sites in the Beaufort and Chukchi Seas last fall and winter and are being sent to Asia for repairs. Shell acknowledged in a statement that the ships would not be repaired in time to drill during the short summer window this year … Shell has invested more than $4.5 billion in leases and equipment and spent several years on an intensive lobbying campaign to persuade federal officials that it could drill safely in the unforgiving waters of the Arctic Ocean. It now acknowledges that the venture has been much more difficult than it anticipated.” The article notes that Shell used two drill ships for Arctic work, the Noble Discoverer and Kulluk. Both suffered accidents moving to or from the Arctic oil fields. “In addition, Coast Guard inspectors found numerous violations on the Discoverer and have referred the matter to federal prosecutors for investigation.”
Problems there were aplenty for Shell in its commitment to Alaska Arctic drilling. CNN (Smith) reports that “Shell began preparatory drilling on two wells in September and October. Before the work began, the drill ship Noble Discoverer slipped its mooring and drifted toward shore in the Aleutian Islands, though it remained afloat ... Then on New Year's Eve, the drill barge Kulluk had to be cut loose in a severe storm while being towed back to its winter home port in Seattle. It ran aground on an uninhabited island about 200 miles south of Anchorage and was stuck there for a week before being refloated. Shell said both vessels are now being towed to Asia for maintenance and repairs.”
The CNN article reported that The World Wildlife Fund called Shell's decision wise under the circumstances. “Throughout the 2012 season, Shell's experience proved time and time again the inherent difficulties in meeting challenging Arctic conditions and the safety standards required by the federal government,” Margaret Williams, The World Wildlife Fund managing director for the region, said in a written statement. The company's decision "should be heeded by others in the industry as they re-examine their future in this inhospitable environment."
CNN also noted, “The U.S. Geological Survey estimates more than 90 billion barrels of oil and nearly 1,700 trillion cubic feet of natural gas may be recoverable by drilling in the North Slope area. Shrinking of the region's sea ice—which hit record lows in 2012—has created new opportunities for energy exploration in the region.”