Wednesday, February 27, 2013

Shell Cancels 2013 Arctic Drilling

 In case you didn't hear, from Shell's statement today:

Shell announces pause in Alaska drilling programme

Royal Dutch Shell plc (“Shell”) today announced it 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 programme that we are pursuing in a safe and measured way,” said  Marvin Odum, Director, Upstream Americas.  “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.”
Alaska holds important energy resources. At the same time, securing access to those resources requires special expertise, technology and an in depth understanding of the environmental and societal sensitivities unique to the region. Shell is one of the leaders in an industry move into offshore Arctic exploration. The company continues to use its extensive experience in Arctic and sub-Arctic environments to prepare for safe activities in Alaska.
Alaska remains an area with high potential for Shell over the long term, and the company is committed to drill there again in the future. If exploration proves successful, resources there would take years to develop.
Shell completed top-hole drilling on two wells in 2012 in the Beaufort and Chukchi Seas, marking the industry’s return to offshore drilling in the Alaskan Arctic after more than a decade. This drilling was completed safely, with no serious injuries or environmental impact.  After the drilling season ended, however, one of Shell’s drilling rigs, the Kulluk, was damaged in a maritime incident related to strong weather conditions. The Kulluk and the second drilling rig, the Noble Discoverer, will be towed to locations in Asia for maintenance and repairs.
“Shell remains committed to building an Arctic exploration program that provides confidence to stakeholders and regulators, and meets the high standards the company applies to its operations around the world,” said Odum. “We continue to believe that a measured and responsible pace, especially in the exploration phase, fits best in this remote area.

Many people were speculating that with the two Arctic oil rigs on the way to Asia for repairs, it wasn't likely they would be drilling summer of 2013. 

From the NY Times piece on this:

The Interior Department, the Coast Guard and the Justice Department are reviewing Shell’s operations, which have included groundings, environmental and safety violations, weather delays, the collapse of its spill-containment equipment and other failures. . .

“This is not a surprise, as Shell has had numerous serious problems in getting to and from the Arctic, as well as problems operating in the Arctic,” said Lois N. Epstein, Arctic program director for the Wilderness Society and a member of the Interior Department panel reviewing Shell’s operations.
“Shell’s managers have not been straight with the American public, and possibly even with its own investors, on how difficult its Arctic Ocean operations have been this past year,” she said. [Whole article here]

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